Current Liabilities Management Prepared by Keldon Bauer Spontaneous Liabilities Spontaneous liabilities arise from the normal course of business. The two major spontaneous liability sources are accounts payable and accruals .
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Prepared by Keldon Bauer
The preceding example suggest that the firm should take the cash discount as long as it can borrow from other sources for less than 37.24%. Because nearly all firms can borrow for less than this (even using credit cards!) they should always take the terms 2/10 net 30.