When Retained Earnings Are Not Enough to Meet Their Long-Term

question 365

Multiple Choice

When retained earnings are not enough to meet their long-term funding needs, businesses may be able to raise funds by

• A) selling common stock.
• B) petitioning the government for a loan.
• C) purchasing additional assets.
• D) decreasing their accounts payable.

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Definitions:

Option to Return

A contractual provision allowing a party to return a product or relinquish a service for reasons specified in the agreement.

Sale on Approval

A transaction agreement where the buyer has the right to return the item within a specified period if it does not meet their satisfaction.

Title

The formal right of ownership of property, which may include real estate or vehicles, among others.

Possession

The act of having physical control or ownership of an object or property.