____________ borrowings are considered a necessity on many grounds.

Short-term

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Long-term

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Medium-term

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Both a and b

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Solution

The correct option is B Long-term
Long-term borrowings are generally used for fixed capital needs like plant & machinery, buildings and projects. They are borrowings which exceed 5 years or more. Hence, long-term borrowings are considered a necessity on many grounds.

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A fixed asset should be financed through

(a) a long term liability

(b) a short term liability

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Why are borrowings a capital receipt?

A Treasury Bill is basically

(a) An instrument to borrow short-term funds

(b) An instrument to borrow long-term funds

(d) None of the above

From the following compute (a) Current Ratio (b) Quick Ratio

$\begin{matrix} S.No & Items & Amount & S.No & Items & Amount Rs & Rs 1. & Current Investments & 40,000 & 7. & Short-term Provisions & 3,000 2. & Inventories & 5,000 & 8. & Other Current Liabilities & 5,000 3. & Trade Receivable & 2,000 & 9. & Short-term Loans and Advances & 4,000 4. & Short-term Borrowings & 20,000 & 10. & Tangible Fixed Assets & 1,00,000 5. & Trade Payables & 2,500 & 11. & Cash & Cash Equivalents & 10,000 6. & Prepaid Expenses & 2,000 & 12. & Advance Tax & 8,000 \end{matrix}$

Short-term borrowings will include all loans within a period of _____ from the date of the loan.

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____________ borrowings are considered a necessity on many grounds.

The correct option is B Long-termLong-term borrowings are generally used for fixed capital needs like plant & machinery, buildings and projects. They are borrowings which exceed 5 years or more. Hence, long-term borrowings are considered a necessity on many grounds.

The correct option is B Long-term
Long-term borrowings are generally used for fixed capital needs like plant & machinery, buildings and projects. They are borrowings which exceed 5 years or more. Hence, long-term borrowings are considered a necessity on many grounds.