Accruals Are "Free" Capital in the Sense That No Explicit

question 135

True/False

Accruals are "free" capital in the sense that no explicit interest must normally be paid on accrued liabilities.

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Definitions:

Merchandiser

A person or company involved in the purchase and sale of goods. In accounting, it refers to a business that sells finished goods to consumers.

Cash Sales

Transactions in which the buyer pays for a good or service with cash at the time of purchase.

Purchases of Merchandise

Transactions involving the buying of goods for resale, typically used in retail or wholesale businesses.

Acid-Test Ratio

A financial metric that measures a company's immediate liquidity by comparing its most liquid assets to its current liabilities.