The two major spontaneous liabilities that provide sources of short-term financing are ________.
A)a line of credit and notes payable
B)accounts payable and accruals
C)a line of credit and term loans
D)accounts receivable and notes payable

Question

Quizplus · Accepted Answer

Accounts payable are amounts owed to suppliers or creditors for goods or services purchased on credit, while accruals are expenses that have been incurred but have not yet been paid. Both of these liabilities are generally considered to be spontaneous because they are created as a natural part of a company's operating cycle, and they provide a source of short-term financing without requiring the company to take on any additional debt or equity. While other liabilities like lines of credit and notes payable can also provide short-term financing, they are not considered to be spontaneous because they require some form of agreement or negotiation between the company and its creditors or lenders.

The Two Major Spontaneous Liabilities That Provide Sources of Short-Term