The Four Basic Sources of Long-Term Funds for a Firm

question 11

Multiple Choice

The four basic sources of long-term funds for a firm are ________.

• A) current liabilities, long-term debt, common stock, and preferred stock
• B) current liabilities, long-term debt, common stock, and retained earnings
• C) long-term debt, paid-in capital in excess of par, common stock, and retained earnings
• D) long-term debt, common stock, preferred stock, and retained earnings

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Definitions:

Manufacturing Overhead

All manufacturing costs that are not directly attributable to a specific product, including indirect materials, indirect labor, and other indirect costs.

Depreciation Factory Building

This term relates to the allocation of the cost of a factory building over its useful life, reflecting its consumption and loss of value over time.

Direct Materials Used

Direct materials used are raw materials that are directly incorporated into a finished product and can be directly associated with the product.

Manufacturing Overhead Cost

Expenses related to the production process that cannot be directly attributed to individual products, such as factory rent, utilities, and maintenance.