If a company secures a one-year bank loan it is considered _______.
A)short-term financing
B)asset funding
C)liability funding
D)long-term financing

Question

Quizplus · Accepted Answer

A one-year bank loan is typically considered short-term financing because it is designed to be paid back relatively quickly, usually within a year. Short-term financing is often used to cover immediate business expenses, such as purchasing inventory or funding payroll, and is usually secured with collateral or a personal guarantee. Long-term financing, on the other hand, is typically used for larger expenses such as buying property or equipment and is usually repaid over a longer period of time, often several years or more.

If a Company Secures a One-Year Bank Loan It Is