Final answer:
Accounts receivable involves collecting money owed to a business. It is essential for maintaining a company's cash flow. Businesses fund their projects through various sources like early-stage investors, profit reinvestment, loans, and stock sales.
Step-by-step explanation:
The activity that involves collecting money owed to a business is known as 3) Accounts receivable. This financial process represents the outstanding invoices a company has or the money the company is owed by its clients. The success of collecting accounts receivable is crucial for a business's cash flow.
When considering financial capital sources to fund long-term projects, businesses can opt for methods such as obtaining money from early-stage investors, reinvesting profits, borrowing through banks or bonds, or selling stock. The choice of source has implications for how the firm must ultimately repay the capital, whether through future profits, interest payments, or equity dilution.The correct answer to the question is 3) Accounts receivable. Accounts receivable involves collecting money owed to a business. It refers to the amount of money that customers owe to the business for products or services that have been provided on credit. For example, if a customer purchases goods on credit and is expected to pay within a certain period, that amount is recorded as accounts receivable on the business's balance sheet.