Which of the following is not a long-term borrowing of a company?Debentures.Term loans.Loans repayable on demand from banks.Long-term finance lease obligations. (2024)

FAQs

Which of the following is not a long-term borrowing of a company?Debentures.Term loans.Loans repayable on demand from banks.Long-term finance lease obligations.? ›

Loan repayable on demand is a short term borrowing and hence is not a long term borrowing of a company.

Long term borrowings are the types of loan that will be repayable after 12 months. The following are types of long-term borrowings: a. Bonds or Debentures have a debt or loan that is borrowed from the market at a fixed rate of interest.

Commercial papers is not a source of long-term finance.

A long-term loan is a type of credit paid over a considerable period, usually more than 3 years. This loan tenure can be somewhere between 3-30 years. Home loans, car loans, and personal loans are the perfect examples of long-term loans.

Loan repayable on demand is a short term borrowing and hence is not a long term borrowing of a company.

Debentures are long-term loans and generally have a maturity date of five to ten years. Since they're unsecured, the issuer typically offers a higher interest rate than they would pay for a secured loan or bond.

Long-term finance can be defined as any financial instrument with maturity exceeding one year (such as bank loans, bonds, leasing and other forms of debt finance), and public and private equity instruments.

Answer and Explanation:

A) Accounts receivable is not considered a type of long-lived asset. The conversion of accounts receivable into cash is expected to occur within the next accounting period and that makes it a current asset.

Capital market, special financial institution, banks, non-banking financial companies, retained earnings and foreign investment and external borrowings are the main sources of long- term finances for companies.

What is a long-term loan in business? ›

A long-term business loan is a type of business loan with a relatively long repayment period, typically spanning three to 10 years. Some long-term business loans, such as certain types of U.S. Small Business Administration (SBA) loans, offer repayment periods of up to 25 years.

Bonds and loans are not the only long-term liabilities companies incur. Items like rent, deferred taxes, payroll, and pension obligations can also be listed under long-term liabilities.

Long-term liabilities or debt are those obligations on a company's books that are not due without the next 12 months. Loans for machinery, equipment, or land are examples of long-term liabilities, whereas rent, for example, is a short-term liability that must be paid within the year.

Long term liabilities are those fixed obligations which, a company has to pay for more than one year. Example of long-term-liabilities are Bonds, Debentures. Loans from financial institutions etc. It is also known as long-term debt.

The option credit card debt is not an example of long term debt. While a mortgage, car loan, and student loan are all examples of long term debt because they are borrowed for longer periods of time, credit card debt is typically considered short term debt.

Long Term Debt Ratio = Long Term Debt ÷ Total Assets

The sum of all financial obligations with maturities exceeding twelve months, including the current portion of LTD, is divided by a company's total assets.

Short term debt is any debt that is payable within one year. Short-term debt shows up in the current liability section of the balance sheet. Long-term debt is debt that are notes payable in a period of time greater than one year. Long-term debt shows up in the long-term liabilities section of the balance sheet.