A Debt That a Business Owes Is Called ________

question 4

Multiple Choice

A debt that a business owes is called ________.

• A) an asset
• B) a liability
• C) owner's equity
• D) revenue

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Definitions:

Banker's Acceptance

A banker's acceptance is a short-term financial instrument issued by a company and guaranteed by a bank, often used in international trade.

5 C's of Credit

The five key elements lenders evaluate to assess a borrower's creditworthiness: character, capacity, capital, collateral, and conditions.

Capacity

The maximum level of output that a company can sustain to produce within a specified period under normal conditions.

Operating Cash Flows

The amount of cash generated by a company's normal business operations over a specific period.