An Operating Loan Is Useful for All of the Following

question 22

Multiple Choice

An operating loan is useful for all of the following, except:

• A) To cover your day-to-day expenses
• B) To purchase additional inventory in anticipation of your peak selling period
• C) To bridge unexpected cash flow interruptions and/or shortfalls
• D) For long-term, costly capital expenditures

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Definitions:

Cost of Goods Sold

represents the direct costs attributable to the production of the goods sold by a company, including material, labor, and overhead costs.

Other Revenue

Income derived from activities not central to a business's primary operations.

Consolidated Income Statement

A financial document that summarizes the combined income and expenses of a parent company and its subsidiaries.

Sales

The revenue a company generates from selling goods or services.