The financial instrument which is used to raise funds for working capital is considered as ____________?
Correct answer: A. commercial paper
- A. commercial paper
- B. commercial notes
- C. notes payable
- D. notes receivable
Explanation
Commercial paper is an unsecured short-term instrument commonly issued by corporations to finance working-capital requirements such as inventory and receivables. The other note terms describe accounting classifications rather than this money-market instrument.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? support@testustad.com
About Business Finance
Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
Practise Business Finance
975 free Business Finance MCQs from Management Sciences, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Exams that ask Management Sciences questions like this
Management Sciences is on 2 papers prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for every one of them.
More Business Finance questions
The short term promissory notes are unsecured and not collateralized against securities, hence it is classified as ___________?
The type of bids which states complete description about quantity of bids and prices of bids is classified as ____________?
The repurchase agreements usually called repos, can be traded _____________?
The retail certificate of deposits which are not traded have face value of ___________?
The type of negotiable certificate of deposits is usually classified as ___________?
The transactions that came into being when borrowing and lending of excess money occurs, are considered as _________?