Asked by Peter Sailb on Jul 15, 2024
Verified
Liberal credit terms for customers is associated with a restrictive short-term financial policy.
Liberal Credit Terms
Credit conditions that are lenient, offering borrowers lower interest rates or extended repayment terms.
Restrictive Policy
A policy intended to limit or regulate certain activities, often used in the context of fiscal or monetary policy to control economic variables.
- Identify the effects of short-term financial strategies on a company's liquidity and functioning.
- Differentiate between restrictive and flexible short-term financial strategies.
Verified Answer
AH
Angela HarrisJul 17, 2024
Final Answer :
False
Explanation :
Liberal credit terms for customers are associated with a flexible short-term financial policy, as it involves extending more generous terms for payment, such as longer periods before payment is due, which is opposite to a restrictive policy that aims to minimize investment in current assets.
Learning Objectives
- Identify the effects of short-term financial strategies on a company's liquidity and functioning.
- Differentiate between restrictive and flexible short-term financial strategies.
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