As a firm expands, which of the following is an automatic source of finance?
A) long‑term debt
B) accounts payable
C) mortgage loans
D) bank loans

Question

As a firm expands, which of the following is an automatic source of finance?​
A) ​long‑term debt
B) ​accounts payable
C) ​mortgage loans
D) ​bank loans

Quizplus · Accepted Answer

Accounts payable, or trade credit, is an automatic source of finance as it is a form of short-term credit that arises naturally from transactions with suppliers as the firm expands. Long-term debt, mortgage loans, and bank loans are not automatic sources of finance and require deliberate actions by the firm to obtain.

As a Firm Expands, Which of the Following Is an Automatic