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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Definitions:

Prosocial Motivation

The desire to benefit others or contribute to the welfare of a group or society.

Skill Variety

The opportunity to do a variety of job activities using various skills and talents.

Job Complexity

The degree to which a job requires a variety of different activities involving multiple skills and talents.

Skill Variety

The degree to which a job requires a range of different activities and skills to carry out the work.