Delaying the Payment of Accounts Payable in Order to Improve

question 286

Multiple Choice

Delaying the payment of accounts payable in order to improve cash management is known as

• A) ruining the firm's credit rating.
• B) stretching the payables.
• C) reducing optimal cash requirements.
• D) float.

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Definitions:

Negotiable Instruments

Negotiable instruments are financial documents that promise payment to the holder and are freely transferable, such as checks, promissory notes, and bills of exchange.

Commercial Paper

An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories, and meeting short-term liabilities.

Paper Documents

Physical documents that contain written or printed information, as opposed to digital or electronic formats.

Lost

Refers to the status of an item or entity that cannot be located or has gone missing.