A Firm Is Said to Be Using Costly Trade Credit

question 86

True/False

A firm is said to be using costly trade credit when its accounts payable are extended beyond the discount period and an explicit cost is shown on the forgone discounts.

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Definitions:

Literal Meaning

The explicit or direct meaning of a word or text, without the use of metaphor, exaggeration, or any other figure of speech.

Metaphor

A figure of speech in which a word or phrase is applied to an object or action to which it is not literally applicable.

Concept

A theoretical notion that captures the core features of its subject.

Terms

Words or expressions used in a specific context with particular meanings.