Which of the Following Statements Is false regarding a Credit

question 71

Multiple Choice

Which of the following statements is false regarding a credit memorandum?

• A) A credit memorandum is added to the balance per the company's books
• B) A credit memorandum could be issued for interest earned on checking balances
• C) A credit memorandum is issued when the bank collects a note for the customer.
• D) A credit memorandum is subtracted from the balance per the company's books.

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Definitions:

Taxable Income

Earnings subject to taxation, which equals gross income minus any allowable deductions and exemptions.

Non-Dividend Paying Corporation

A corporation that chooses not to distribute any part of its earnings to shareholders as dividends, typically to reinvest in the business.

Limited Liability Company

An organizational form that merges the direct taxation benefits of a partnership or sole proprietorship with the limited legal responsibility characteristic of a corporation.

Hedge Funds

Investment funds that employ diverse strategies to earn active returns for their investors, often engaging in more complex trading, portfolio-construction, and risk management techniques than conventional mutual funds.