The facts (1)that no explicit interest is paid on accruals and (2)that the firm can control the level of these accounts at will makes them an attractive source of funding to meet working capital needs.

Question

Quizplus · Accepted Answer

The firm cannot control the level of accruals at will, as they are determined by business operations and accounting practices, not by the firm's discretion.

The Facts (1)that No Explicit Interest Is Paid on Accruals