Which One of the Following Statements Is Correct

question 40

Multiple Choice

Which one of the following statements is correct?

• A)A farmer generally uses a type of financing that employs trust receipts to provide financing during the growing season.
• B)Floor plan arrangements are most applicable to large,easily identifiable types of inventory.
• C)A drug store is more apt to have a financing arrangement involving trust receipts than one involving a blanket lien.
• D)A third-party inventory manager is generally involved with the lender and the borrower in a floor plan arrangement.
• E)A direct loan from a bank is generally less expensive than a loan involving commercial paper.

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Definitions:

Specific Project

A particular and defined piece of work, usually with a set duration, objectives, and resources, meant to achieve a specific goal.

Restricted Contribution

Funds donated with specific conditions attached by the donor, limiting the use of the funds by the recipient.

Statement of Changes

A financial statement delineating how and why specific equity accounts in a company's balance sheet changed over a period.

Net Assets

The total assets of a company minus its total liabilities, representing the owners' equity in the company.