Managers Who "Stretch Their Payables" Are Attempting To

question 93

Multiple Choice

Managers who "stretch their payables" are attempting to:

• A) repay more recent charges prior to early charges.
• B) improve their current ratio prior to preparation of financial statements.
• C) offer finished goods at a discount for repayment.
• D) obtain a longer period of short-term financing.

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Definitions:

Dividends

A portion of a company's earnings distributed to its shareholders, typically in the form of cash payments or additional shares.

Straight Line Amortization

A method of allocating the cost of an intangible asset over its useful life in equal installments.

Equity Method

An accounting technique used to record investments in which the investor has significant influence, but not control, over the investee.

Bonds Payable

A financial accounting term used to describe the outstanding debts owed by a company through issuing bonds.