Which of the Following Is TRUE of Long-Term Funds

question 12

Multiple Choice

Which of the following is TRUE of long-term funds?

• A)They provide an easy way to reduce financing costs because they are relatively cheaper than short-term funds.
• B)They are a type of investment fund which invests in money market investments of high quality and low risk.
• C)They are the sources that supply the financing necessary to support a firm's capital budgeting activities.
• D)They are the funds available to a business on the basis of inventory held and require detailed inventory tracking.

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Definitions:

Closing the Revenue

The process of transferring the balances from revenue accounts to a permanent equity account at the end of an accounting period.

Capital Account Balance

The amount in a company or partnership's capital account, representing ownership interest in the entity.

Withdraws

Money taken out of a business by its owner(s) for personal use.

Partnership

A business structure where two or more individuals share ownership, as well as the profits or losses of the business.