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AICPA CPA-Business Exam - Topic 2 Question 46 Discussion

Actual exam question for AICPA's CPA-Business exam
Question #: 46
Topic #: 2
[All CPA-Business Questions]

The working capital financing policy that subjects the firm to the greatest risk of being unable to meet the firm's maturing obligations is the policy that finances:

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Suggested Answer: C

Choice 'c' is correct. The working capital financing policy that finances permanent current assets with short-term debt subjects the firm to the greatest risk of being unable to meet the firm's maturing obligations.

Choices 'a' and 'b' are incorrect because the use of long-term debt financing produces the smallest risk of being unable to meet maturing obligations.

Choice 'd' is incorrect because, although financing fluctuating current assets with short-term debt exposes the firm to some risk, it is not the greatest or the smallest.


by Kate at May 09, 2022, 08:31 AM

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Phillip
5 months ago
Are we sure about C? Sounds a bit off to me.
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Dorthy
6 months ago
A is a solid option too, but not the riskiest.
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Xenia
6 months ago
Wow, I never thought about it that way!
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Nikita
6 months ago
I disagree, I think D is the right choice.
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Tonette
6 months ago
Definitely C, short-term debt for permanent assets is risky.
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Pauline
6 months ago
I'm not entirely sure about this one. The question mentions that the virus-pattern file is causing problems, but it's not clear if that means I need to roll back the other components as well. I'll have to read the options more closely.
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Maddie
6 months ago
Hmm, I'm a bit unsure about this one. I know props.conf is used for data parsing, but I can't remember if transforms.conf is also involved in transforming raw data. I'll have to think this through carefully.
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Stephen
6 months ago
This seems like a straightforward question about IT vendor selection. I'll focus on understanding the key concepts like cost-benefit analysis, contract management, and procurement frameworks.
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