If a Transfer of Receivables Is Really a Borrowing but Is

question 88

Multiple Choice

If a transfer of receivables is really a borrowing but is erroneously treated as a sale

• A)then both assets and liabilities are understated.
• B)then both assets and liabilities are overstated.
• C)then both assets and equity are understated.
• D)then ratios like debt-to-equity are consequently distorted by the overstatements.

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