Which of the following is considered a spontaneous source of financing?
A) short-term notes payable
B) accounts payable
C) long-term notes payable
D) preferred stock

Question

Quizplus · Accepted Answer

Accounts payable are considered a spontaneous source of financing because they arise from business operations and do not require any formal agreement or negotiation between parties. They represent amounts owed to suppliers for goods or services that have already been received and are typically due within a short period of time, such as 30 days. Short-term notes payable and long-term notes payable require formal agreements and negotiations with creditors, while preferred stock represents equity financing rather than debt financing.

Which of the Following Is Considered a Spontaneous Source of Financing