The Most Common Way to Finance a Temporary Cash Deficit

question 57

Multiple Choice

The most common way to finance a temporary cash deficit is the use of:

• A) Banker's acceptances
• B) Call options
• C) Commercial paper
• D) Unsecured bank loans

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Definitions:

Stockholders' Equity

The value of a company's assets minus its liabilities, representing the ownership interest of the shareholders.

Accounting Equation

The fundamental equation of accounting stating that Assets = Liabilities + Owners’ Equity.

Common Stock

Equity ownership in a corporation, with voting rights and potential dividends.

Accounts Payable

The sum of funds that a company is required to pay to its suppliers for goods and services obtained on credit.