Short-term debt is most often used by a business for working capital and is repaid out of the proceeds of its sales.

Question

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Short-term debt, also known as current liabilities or short-term liabilities, is often used by businesses to finance day-to-day operations and cover expenses such as salaries, rent, and inventory. This type of debt is typically repaid from the company's cash flow, which is generated through sales and collections from customers.

Short-Term Debt Is Most Often Used by a Business for Working