Because of How They Are Structured, Traditional Industries Such as Textiles

question 23

Multiple Choice

Because of how they are structured, traditional industries such as textiles, furniture manufacturing, and clothing manufacturing commonly use which of the following debt financing sources?

• A)trade credit
• B)investing
• C)leasing
• D)factoring

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Definitions:

Accounts Receivable

Represents money owed to a company by customers for products or services sold on credit.

Indirect Method

A method of preparing the cash flow statement where net income is adjusted for changes in balance sheet accounts to calculate cash from operating activities.

Net Income

Represents the total earnings of a company after subtracting all expenses, taxes, and costs from its total revenue.

Accounts Receivable

Debts owed by customers to a corporation for goods or services that have been delivered but remain unpaid.