Which one of the following statements is most correct if a seller extends credit to a purchaser for a period of time longer than the purchaser’s operating cycle?

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Here is the solution for Which one of the following statements is most correct if a seller extends credit to a purchaser for a period of time longer than the purchaser’s operating cycle?. The solution is given after the options.

Which one of the following statements is most correct if a seller extends credit to a purchaser for a period of time longer than the purchaser’s operating cycle?

Will have a lower level of accounts receivable than those companies whose credit period is shorter than the purchaser’s operating cycle.

Is, in effect, financing more than just the purchaser’s inventory needs.

Is, in effect, financing the purchaser’s long-term assets.

Has no need for a stated discount rate or credit period.

Correct Answer

Is, in effect, financing more than just the purchaser’s inventory needs.

Explanation:

Is, in effect, financing more than just the purchaser’s inventory needs. is the answer for Which one of the following statements is most correct if a seller extends credit to a purchaser for a period of time longer than the purchaser’s operating cycle?

Conclusion:

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