When a Firm Stretches Accounts Payable Without Hurting Its Credit

question 166

Multiple Choice

When a firm stretches accounts payable without hurting its credit rating, the cost of giving up a cash discount is ________.

• A) reduced
• B) increased
• C) unaffected
• D) increased or decreased depending on the opening accounts payable balance

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Definitions:

Handwritten Signature

A person's unique method of writing their name with pen and paper, often used for authorization or personal verification.

Bearer Instrument

Any instrument that is not payable to a specific person, including instruments payable to the bearer or to “cash.”

Authorized Representative

An individual or entity legally empowered to act on behalf of another person or group in business dealings.

Negotiate

The process of discussing something with one or more people in order to reach an agreement or compromise.