Firms will use short-term loans to support working capital. Which of the following is not a source of short-term funding?
A)Unsecured bank loans
B)Commercial paper
C)Accounts payable
D)Accounts receivable

Question

Firms  will use short-term loans to support working capital.   Which of the following is not a source of short-term funding? ​
A)Unsecured bank loans ​
B)Commercial paper ​
C)Accounts payable ​
D)Accounts receivable​

Quizplus · Accepted Answer

Accounts receivable are assets that a firm can use as collateral to obtain short-term funding, such as factoring or invoice discounting. Therefore, accounts receivable are not a source of short-term funding in and of themselves. Unsecured bank loans, commercial paper, and accounts payable are all sources of short-term funding.

Firms Will Use Short-Term Loans to Support Working Capital