In Purchasing an Existing Business, Alice Has Decided to Lease

question 67

Multiple Choice

In purchasing an existing business, Alice has decided to lease the equipment and fixtures from the original owner rather than purchasing it outright to save money initially. This is an example of ______.

• A) holdback money
• B) thinning the assets
• C) escrow settlement
• D) goodwill

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Definitions:

GMO-Free

Pertaining to products or foodstuffs that do not contain genetically modified organisms.

Bank Reconciliation

The process of matching the balances in an entity’s accounting records for a cash account to the corresponding information on a bank statement.

Cash Account

An account that tracks the amount of cash on hand, including currency, checks, and balances in bank accounts.

Accounts Receivable

Debts owed by clients to a firm for goods or services provided but not yet compensated for.