Ideally, Permanent Current Assets Should Be Financed with Short-Term Borrowings

question 58

True/False

Ideally, permanent current assets should be financed with short-term borrowings.

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Definitions:

Bonds Payable

A long-term liability account that records the amounts owed by an entity to bondholders, to be repaid at a future date.

Installment Note

A debt that requires the borrower to make equal periodic payments to the lender for the term of the note.

Periodic Payments

Regular, scheduled payments made over a period of time, such as monthly rent or quarterly insurance premiums.

Borrower

An individual or entity that takes funds from a lender under the agreement to return it with interest or equity.