"Stretching" Accounts Payable Is a Widely Accepted,entirely Ethical,and Costless Financing

question 91

True/False

"Stretching" accounts payable is a widely accepted,entirely ethical,and costless financing technique,which is particularly useful when suppliers' production plants are at full capacity .

---

Definitions:

Covenants

Agreements or clauses, especially in contracts and property leases, that stipulate actions the parties must perform or avoid.

Monitoring

The process of systematically observing, checking, and recording activities or data to ensure standards are met or progress is being made.

Moral Hazard

The situation where one party is more likely to take risks because they do not bear the full consequences of their actions.

Shirking

Avoiding or neglecting duties, responsibilities, or work, often covertly, to reduce personal effort while still receiving compensations or benefits.