Practicing Success

Target Exam

CUET

Subject

Business Studies

Chapter

Financial Management

Question:

Identify the source is used to finance current assets in addition to current liabilities.

Options:

Share Capital

Short term Sources

Long term Sources

Bank Overdraft

Correct Answer:

Long term Sources

Explanation:

The correct answer is option (3) : Long term Sources

Long term Sources

Long-term sources of financing are typically used to finance current assets in addition to current liabilities. Long-term financing options, such as loans, bonds, and equity, provide the necessary funds to cover both short-term and long-term financial needs, including current assets like inventory, accounts receivable, and fixed assets, in addition to current liabilities like accounts payable and short-term loans.