Choose the Correct Definition for Long-Term Viability

question 5

Multiple Choice

Choose the correct definition for long-term viability.

• A)The ability to produce cash from the business to meet current obligations
• B)The ability to meet long-term obligations as they fall due for payment
• C)The ability of the business to continue to operate profitably
• D)The ability of the business to borrow further funds if needed

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Definitions:

Cash

Cash refers to money in the form of currency, including coins and banknotes, that can be used immediately for transactions.

Expense

An outflow of money or other resources incurred as a result of the company’s operations to generate revenue, representing the cost of doing business.

Prepaid Insurance

An asset account that represents insurance payments made in advance for future coverage periods.

Insurance Expense

The cost incurred by a company to insure its assets, operations, or liabilities against various risks over a specific period.