Although Not the Primary Source of Financing for Most Small

question 108

Multiple Choice

Although not the primary source of financing for most small business start-ups, another source of early financing is:

• A)family members.
• B)commercial banks.
• C)business suppliers.
• D)asset-based lenders.

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Definitions:

Allowance for Doubtful Accounts

An estimate made by a company to account for receivables that may not be collected due to credit risk.

Bad Debt Expense

An expense reported on the income statement, representing the amount of receivables a company does not expect to collect.

Allowance for Doubtful Accounts

A contra-asset account that represents an estimate of the amount of accounts receivable which may not be collected, reducing the gross amount of receivables reported on the balance sheet.

Balance Sheet

A report detailing a firm's assets, liabilities, and owners' equity at a particular moment, offering a glimpse into its financial health.