Gratinut Entos, an Automobile Company, Wants to Launch a New

question 113

Multiple Choice

Gratinut Entos, an automobile company, wants to launch a new model of bike that would appeal to young adults. The company issues its own formal IOUs to fund the project. Which of the following sources of long-term funds is being used by Gratinut Entos in the given scenario?

• A) Term loans
• B) Commercial paper
• C) Corporate bonds
• D) Direct investments from owners

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Definitions:

Current Assets

Short-term assets that are expected to be converted into cash, sold, or consumed within one year or within the business's operating cycle, whichever is longer.

Operating Cycle

The average period of time between the purchase of goods or services and the receipt of cash from sales, typical in the context of a company's day-to-day operations.

APB Opinion No.22

A guideline issued by the Accounting Principles Board that requires companies to disclose their accounting policies in their financial statements.