Question 5
A customer’s credit limit has been established at $10,000 and current outstanding A/R is $7,000. The customer has active, unshipped sales orders with request dates that are two months in the future and total $3,000. The customer calls today with a $500 order to be shipped immediately.
What happens to the order?
The order goes on hold, because credit checking is performed for the total exposure, which includes open orders regardless of their request dates.
The order does not go on hold, because credit checking only compares the dollar value for open orders against the credit limit.
The order does not go on hold. The system automatically determines that the request date of the new order comes before the request dates of the existing open orders. The system will allow the $500 order to be processed, and put a credit hold on the order with the request date furthest in the future.
The order goes on hold, because the total A/R amount is greater than 5% of the total of A/R and open orders.
The order does not go on hold, because the actual outstanding A/R has not exceeded the credit limit, and the $500 order would still cause the total exposure to be less than $10,000.
Correct answer: A