Which of the following statements is FALSE?
A)Trade credit is, in essence, a loan from the selling firm to its customer.
B)The accounts receivable balance represents the amount that a firm owes its suppliers for goods that it has received but for which it has not yet paid.
C)The transaction costs for obtaining trade credit are lower than alternative financing options.
D)Providing financing at below-market rates is an indirect way to lower prices for only certain customers.

Question

Quizplus · Accepted Answer

The accounts receivable balance represents the amount that the firm's customers owe the firm for goods or services that they have received but not yet paid for. This is not the amount that the firm owes its suppliers.

Which of the Following Statements Is FALSE