Which of the following statements is FALSE?
A)One factor that contributes to the length of a firm's receivables and payables is the delay between the time a bill is paid and the cash is actually received.
B)The credit that the firm is extending to its customer is known as trade credit.
C)Collection float is the amount of time it takes before payments to suppliers actually result in a cash outflow for the firm.
D)Under the Modigliani-Miller assumptions of perfect capital markets, the amounts of payables and receivables are irrelevant.

Question

Quizplus · Accepted Answer

Collection float refers to the time it takes for a check or payment made by a customer to be processed and the funds to be available in the firm's account. It does not relate to payments to suppliers or cash outflows for the firm; instead, it is associated with incoming payments.

Which of the Following Statements Is FALSE