Which of the Following Is More Likely for a Firm

question 72

Multiple Choice

Which of the following is more likely for a firm practicing the "relaxed" strategy of long- versus short-term borrowing at the height of sales demand?

• A) It will borrow heavily on a short-term basis.
• B) It will invest heavily in marketable securities.
• C) It will borrow heavily on a long-term basis.
• D) Long-term financing will approximate capital requirements.

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Definitions:

Chart Of Accounts

A systematic list of all ledger account titles and numbers used by a company, detailing every type of transaction that can be made.

Listed

Refers to securities that have been admitted to trading on a formal exchange, ensuring they meet certain criteria and standards.

Debit Balance

A balance occurring when the sum of debits in an account exceeds the sum of credits.

Credits

Accounting entries that can either decrease assets or increase liabilities and equity on a company's balance sheet.