If a Firm Uses Short-Term Sources of Finance Instead of Long-Term

question 25

True/False

If a firm uses short-term sources of finance instead of long-term, its financial risk is increased.​

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Definitions:

Finished Goods Inventory

The stock of completed products ready for sale at the end of an accounting period.

Raw Materials

Raw materials are the basic materials from which products are manufactured or made, often used in the initial stages of the production process.

Factory Overhead

Every manufacturing-related expense, apart from direct labor and materials.

Debit Balance

A situation in accounting where the sum of debits exceeds the sum of credits, often indicating expenses or assets.