Which of the Following Statements Is True of the Different

question 64

Multiple Choice

Which of the following statements is true of the different types of short-term credits?

• A) The fact that no explicit interest cost is paid on accruals and that the firm can exercise considerable control over their level makes accruals an attractive source of additional funding.
• B) Commercial paper is a type of secured promissory note issued by large, financially strong firms.
• C) Banks generally charge a commitment fee on the used balances of credit lines to compensate for guaranteeing the availability of revolving credit.
• D) The funds used by a firm to maintain a compensating balance with the bank cannot be used by the firm to pay its bills or to invest and can earn no interest.
• E) The credit created when one firm buys on credit from another firm is known as accounts receivable.

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Definitions:

Transportation Economies

The cost-saving benefits achieved through efficient management of transportation activities, often through scale or optimized routing.

High-Quality Personnel

Individuals within an organization who are highly skilled, knowledgeable, and capable, contributing significantly to its success.

DC Operations

Activities involved in the day-to-day functioning of a Distribution Center, including goods receipt, storage, packaging, and shipping.

Contract Warehousing

A logistics service model where a company hires a third-party provider under a contract to manage and operate a warehouse on their behalf.