Address the following regarding the various types of short-term financing available to health care organizations:
o Explain the differences between accounts payable and trade credit.
o Explain the opportunity costs involved with some types of trade credit.
o How do short-term bank notes provide what amounts to permanent financing at short-term rates?
o What are the risks involved with short-term bank notes?
o What types of organizations are capable of offering commercial paper as a source of short-term financing
Accounts payable are debts that a person or a company owes to suppliers which must be paid off within a certain amount of time in order to avoid a default ( a possible suspension of the account). Trade credit is the process of buying equipment and supplies for business start-ups from suppliers or vendors letting them finance the purchases of the business owners. (Buy now, pay later) It is also known as an open account because the suppliers and/or vendors keep the accounts open and the business owner can buy from the suppliers ...
Accounts payable are defined as well as other short-term financing forms available to health care organizations.