Which of the Following Statements Is FALSE

question 35

Multiple Choice

Which of the following statements is FALSE?

• A)The lower the discount percentage offered,the greater the cost of forgoing the discount and using trade credit.
• B)A firm should choose to borrow using accounts payable only if trade credit is the cheapest source of funding.
• C)A firm should always pay on the latest day allowed.
• D)A firm should strive to keep its money working for it as long as possible without developing a bad relationship with its suppliers or engaging in unethical practices.

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Definitions:

Income Taxes Payable

The sum of income tax that a corporation is liable to pay to the government but has not paid so far.

Cash Payments

Transactions involving the transfer of cash from one entity to another as a form of compensation or settlement.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded for a fixed asset since it was put into use.

Statement of Cash Flows Worksheet

A tool used to analyze and summarize the changes in cash and cash equivalents of a business during a specific reporting period through operational, investing, and financing activities.