fm22 3 - j. A moderate short-term financing policy matches...

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Answers and Solutions: 22 - 3 j. A moderate short-term financing policy matches asset and liability maturities. It is also referred to as the maturity matching, or "self-liquidating" approach. When a firm finances all of its fixed assets with long-term capital but part of its permanent current assets with short-term, nonspontaneous credit this is referred to as an aggressive short-term financing policy. With a conservative short-term financing policy permanent capital is used to finance all permanent asset requirements, as well as to meet some or all of the seasonal demands. k. A financing policy that matches asset and liability maturities. This is a moderate policy. l. Continually recurring short-term liabilities, especially accrued wages and accrued taxes. m. Trade credit is debt arising from credit sales and recorded as an account receivable by the seller and as an account payable by the buyer. Stretching accounts payable is the practice of deliberately paying accounts payable late. Free trade credit is credit
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