Question (5) A business\'s financial statements show a significant increase in n

Question

Question (5) A business's financial statements show a significant increase in notes receivable due from owners. What is the likely impact of this on the business's borrowing needs? Borrowing needs are likely to increase during the period. Borrowing needs are likely to decrease because the loans from owners can be easily collected. Borrowing needs will likely decrease because the company is borrowing from its owners. Borrowing needs will remain the same because businesses are not allowed to lend to owners.

Explanation / Answer

Option A since the money got struck here we need additional borrowings from the other lenders to run the business safely

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