The statement concerning the average settlement period for creditors that is correct is:
A) A change in the creditors turnover period of 56 days to 65 days means that creditors are being paid faster.
B) It is always best for the business to make creditors wait for their money for as long as possible.
C) Creditors provide a free source of finance for a business.
D) It is best to pay creditors as quickly as possible.

Question

Quizplus · Accepted Answer

Creditors do indeed provide a free source of finance for a business, as the business can use the goods or services supplied without immediate payment, effectively borrowing resources without interest until the payment is due.

The Statement Concerning the Average Settlement Period for Creditors That