The Owner of a Mountain Cycle Shop Worries That Cash

question 126

Multiple Choice

The owner of a Mountain Cycle Shop worries that cash flows may be insufficient to pay his current operating expenses.While he anticipates a surplus of cash inflows as warm weather approaches,he needs to borrow funds now to meet his immediate obligations.He can best resolve his cash flow concerns by obtaining ________ financing.

• A)intermediate
• B)contingency
• C)short-term
• D)long-term

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Definitions:

Retained Earnings Deficit

A negative balance in retained earnings, indicating that a company has more accumulated losses over time than accumulated profits.

Debit Balance

A situation where the total debits in an account exceed the total credits, indicating an excess of expenses or assets over income or liabilities.

Large Stock Dividend

A distribution of a significant number of additional shares to shareholders, usually as a percentage of the shares they already hold, which often dilutes the share value.

Outstanding Shares

The total number of shares of a corporation's stock that are currently owned by all shareholders, including share blocks held by institutional investors and restricted shares owned by the company’s officers.