Match the items of List – I with the items of List – II. List-IList-II (a) A moderate approach to…
In working capital financing policy, a moderate (maturity-matching) approach matches the maturities of assets and liabilities (iii), short-term credit consists of any…
Choose your answer
Match the items of List – I with the items of List – II.
| List-I | List-II |
|---|---|
| (a) A moderate approach to current asset financing. | (i) Continually recurring short-term liabilities. |
| (b) Short-term credit. | (ii) Some permanent current assets and even some fixed assets, are financed with short- term debt. |
| (c) Accrued liabilities. | (iii) Involves matching the maturities of assets and liabilities. |
| (d) Aggressive approach to current assets financing. | (iv) Any liability originally scheduled for payment within one year. |
Answer and explanation
Correct answer B
In working capital financing policy, a moderate (maturity-matching) approach matches the maturities of assets and liabilities (iii), short-term credit consists of any liability originally scheduled for payment within one year (iv), accrued liabilities are continually recurring short-term liabilities such as wages and taxes payable (i), and an aggressive approach finances some permanent current assets (and even fixed assets) with short-term debt (ii).
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UGC NET Management