The Four Basic Sources of Long-Term Funds for the Business

question 14

Multiple Choice

The four basic sources of long-term funds for the business firm are

• A) long-term debt, common stock, preferred stock, and retained earnings.
• B) current liabilities, long-term debt, common stock, and preferred stock.
• C) current liabilities, long-term debt, common stock, and retained earnings.
• D) long-term debt, paid-in capital in excess of par, common stock, and retained earnings.

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Definitions:

Carrying Amount

The book value of an asset or liability in a company's financial statements, based on its original cost adjusted for factors such as depreciation or amortization.

Contingent Liability

A potential financial obligation that may arise in the future, dependent on the outcome of a specific event or set of circumstances.

Probable

A term signifying a high likelihood or certainty that a future event will occur.

Estimable

Capable of being approximated or determined in value, often referring to an amount or value in accounting.