XYZ Company experienced a significant increase in sales as a result of its new promotional campaign.Yesterday,however,it realized that because most of those sales were on credit,it did not have enough money in the bank to pay this month's bills.XYZ can take care of this situation temporarily by
A) obtaining long-term financing.
B) disallowing credit sales.
C) selling commercial drafts.
D) obtaining short-term financing.
E) issuing stock.

Question

Quizplus · Accepted Answer

Obtaining short-term financing is the best option in this situation as it can provide immediate cash flow to pay the bills. Long-term financing and issuing stock may take too long to be approved and disallowing credit sales may hurt the company's sales in the long run. Selling commercial drafts may not be applicable depending on the nature of the company and the market it operates in.

XYZ Company Experienced a Significant Increase in Sales as a Result