Financial Statements Can Mislead a Potential Purchaser Trying to Develop

question 73

True/False

Financial statements can mislead a potential purchaser trying to develop an accurate business valuation.

---

Definitions:

Accommodation Party

A party who signs an instrument to provide credit for another party who has also signed the instrument.

Credit

The granting of a loan and the creation of debt; any form of deferred payment, or the ability of an individual or company to borrow money with the promise to repay it at a later date.

Commercially Reasonable

Actions that a prudent person would reasonably take under comparable circumstances, particularly in business transactions.

Notice of Dishonor

A formal notification that a negotiable instrument, like a check, has been refused payment.