Which of the following is an example of long-term borrowing?
(A) Bank bills
(B) Grants
(C) Mortgage
(D) Overdraft - HSC - SSCE Business Studies - Question 1 - 2001 - Paper 1
Question 1
Which of the following is an example of long-term borrowing?
(A) Bank bills
(B) Grants
(C) Mortgage
(D) Overdraft
Worked Solution & Example Answer:Which of the following is an example of long-term borrowing?
(A) Bank bills
(B) Grants
(C) Mortgage
(D) Overdraft - HSC - SSCE Business Studies - Question 1 - 2001 - Paper 1
Step 1
Identify long-term borrowing options
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Answer
Long-term borrowing typically includes loans that are paid back over a period longer than one year, allowing for extended repayment terms.
Step 2
Evaluate the options
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Answer
Bank bills are usually short-term instruments used for funding.
Grants are not a form of borrowing, as they are funds provided that do not require repayment.
Mortgages are loans specifically used to purchase real estate and are repaid over a long term, making them a clear example of long-term borrowing.
Overdraft is a short-term borrowing facility typically linked to a current account.
Step 3
Select the correct answer
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Answer
Based on the evaluation, the correct answer is (C) Mortgage, as it represents an example of long-term borrowing.
