Question

22. Which of the following does not demonstrate evidence regarding the ability to consummate a refinancing of short-term debt? A) Management indicated that they are going to refinance the obligation. B) Actually refinance the obligation. C) Have capacity under existing financing agreements that can be used to refinance the obligation. D) Enter into a financing agreement that clearly permits the entity to refinance the obligation.

Answer 1

A) Management indicated that they are going to refinance the obligation.

Step-by-step explanation:

The short-term financing is made immediately as it is required to cover the short-term obligations of the entity in a very short time.

The Manage does not indicate the refinancing of the obligation from short-term debt because they have less time to fulfill the obligation. The indiction can be made in long-term debt financing.

All of the other options indicate that the refinancing can be made from the short-term debt.