Which short-term financing policy states that short-term cash needs should be financed with short-term debt and long-term cash needs should be financed with long-term sources of funds?

Question

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The matching principle states that short-term cash needs should be financed with short-term debt and long-term cash needs should be financed with long-term sources of funds. This approach ensures that the life of the asset being financed matches the repayment period of the financing, reducing the risk of liquidity problems and matching the cash flows of the company. The other policies listed (aggressive policy, evergreen credit, conservatism principle, duration policy) do not specifically address the matching of short-term and long-term financing with cash needs.

Which Short-Term Financing Policy States That Short-Term Cash Needs Should