The company offering a discount on accounts payable is trying to ________ and the firm that pays on time rather than taking a discount is attempting to ________.
A)speed up cash outflow; slow down cash inflow
B)speed up cash inflow; slow down cash inflow
C)speed up cash inflow; slow down cash outflow
D)speed up cash outflow; slow down cash outflow

Question

Quizplus · Accepted Answer

The company offering a discount on accounts payable is trying to speed up its cash inflow by encouraging customers to pay earlier. The firm that pays on time rather than taking a discount is attempting to slow down its cash outflow by not paying earlier than necessary. Therefore, the best choice is C, which shows that the discount-offering company wants to speed up cash inflow, whereas the paying-on-time firm wants to slow down cash outflow.

The Company Offering a Discount on Accounts Payable Is Trying