Week 8 Checkpoint Short Term Financing

Week 8 Checkpoint Short Term Financing - Week 8 Checkpoint:...

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Week 8 Checkpoint: Shot-Term Financing Explain the difference between accounts payable and trade credit. Accounts payable is what a company has an obligation to pay its suppliers for buying goods or services. It is essentially the bills that are due for things they have purchased. The bills are usually paid over time instead of requiring immediate payment, and can also compile if more goods are needed before the previous bill was paid. The bills are paid on a monthly basis, and they receive no discounts. Trade credit is a credit between two companies that they give each other for doing business together. This credit can be short or long term and usually will consist of some discounts if the credit is paid on time or early. Explain the opportunity costs involved with some types of trade credit. Opportunity costs are the discounts that are offered between two companies that are doing a trade credit. For example a company one company extends a credit that says 5/10 Net 60; this
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Week 8 Checkpoint Short Term Financing - Week 8 Checkpoint:...

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