one of your firm's customers is "stretching" its accounts payable, this may be a nuisance but it does not represent a real financial cost to your firm as long as the customer periodically pays off its entire balance.

Question

Quizplus · Accepted Answer

While stretching accounts payable may not necessarily incur a direct financial cost, it can have an impact on the cash flow and financial stability of the firm if the customer consistently delays payments or defaults on payments. In such cases, the firm may need to invest more resources in collection efforts, risk losing future business, and may even experience financial losses.

One of Your Firm's Customers Is "Stretching" Its Accounts Payable