Which of the Following Statements Is FALSE

question 25

Multiple Choice

Which of the following statements is FALSE?

• A)Under the Modigliani-Miller assumptions of perfect capital markets,the amounts of payables and receivables are irrelevant.
• B)One factor that contributes to the length of a firm's receivables and payables is the delay between the time a bill is paid and the cash is actually received.
• C)Collection float is the amount of time it takes before payments to suppliers actually result in a cash outflow for the firm.
• D)The credit that the firm is extending to its customer is known as trade credit.

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Definitions:

State Taxes

State taxes are financial charges imposed by individual states on income, property, sales, and other activities, varying widely between different states.

Local Taxes

Taxes imposed by local governments, such as cities or counties, which can include property taxes, sales taxes, and income taxes.

W-2

The form that an employer must send to an employee and the IRS at the end of the year, which reports the employee's annual wages and taxes withheld.

Income Statement

A financial statement that shows a company's revenues and expenses over a specific period of time, resulting in net profit or loss.