If One of Your Firm's Customers Is "Stretching" Its Accounts

question 52

True/False

If one of your firm's customers is "stretching" its accounts payable, this may be a nuisance but does not represent a real financial cost to your firm as long as the firm periodically pays off its entire balance.

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Definitions:

Sales Budget

A financial plan that estimates future sales, either in units or monetary value, over a specific period, aiding management in decision-making and resource allocation.

Cash Balance

The amount of cash or cash equivalents a company or individual holds, reflecting the liquidity available for use.

Total Receipts

The sum of all money received by a company during a specific period, including sales, refunds, investments, and any other income sources.

Financial Budgets

Detailed plans that outline an organization's expected revenues, expenses, and capital expenditures over a particular period.