Spontaneous funds are generally defined as follows: Select one:

a. A forecasting approach in which the forecasted percentage of sales for each item is held constant.
b. Funds that a firm must raise externally through short-term or long-term borrowing and/or by selling new common or preferred stock.
c. Funds that arise out of normal business operations from its suppliers, employees, and the government, and they include immediate increases in accounts payable, accrued wages, and accrued taxes.
d. The amount of cash raised in a given year minus the amount of cash needed to finance the additional capital expenditures and working capital needed to support the firm's growth.
e. Assets required per dollar of sales.

The correct answer is letter "C": Funds that arise out of normal business operations from its suppliers, employees, and the government, and they include immediate increases in accounts payable, accrued wages, and accrued taxes.

Explanation:

Spontaneous funds are all those incomes that a company receives without expecting them. The money can be received from different internal and external sources but they imply obligations. It means taxes are likely to be deducted after reporting the income in the firm's accounting books.