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Short-term credit, or short-term financing, is any liability that is scheduled for repayment within one year. Sources of short-term funds include banks, suppliers, securities firms,
Short-term credit, or short-term financing, is any liability that is scheduled for repayment within one year. Sources of short-term funds include banks, suppliers, securities firms, and insurance companies. The obligations are in the form of bank loans, trade credit, commercial paper, and accruals. Some types of short-term financing are easier to obtain and manage than others. Financial managers will consider the costs of the various sources of financing as part of a cash management strategy. The following statement refers to a source of short-term credit. Select the best term to complete the sentence. Agreements with banks for specific amounts, interest rates, and terms are called short-term Hansborough is a manufacturing company. Hansborough's new CFO is reviewing the company accruals the accounting staff. She has learned that Hansborough has not taken advantage of discounts in the past, and it typically pays its suppliers 30 days after the invoice date. The CFO has instructed the accounting staff to take advantage of all discounts and to stretch payments to those suppliers that do not offer discounts to 45 days. What type of financing is this? Commercial paper Trade credit Accrual Bank loans
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