Which of the Following Statements Is False Regarding Trade Credit

question 204

Multiple Choice

Which of the following statements is false regarding trade credit?

• A) Trade credit is created when a firm uses cash to make purchases from another firm.
• B) Trade credit is not usually an interest-bearing asset for the firm granting the credit.
• C) Trade credit possesses a degree of default risk.
• D) Collection of trade receivables can be sped up by offering discounts.
• E) Trade credit is an important source of external financing for Canada firms.

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