Which of the Following Statements Is True Regarding an Accommodation

question 6

Multiple Choice

Which of the following statements is true regarding an accommodation surety?

• A)An accommodation surety must provide adequate collateral to the creditor.
• B)An accommodation surety is usually a professional such as a bonding company,who is paid for serving as a surety.
• C)An accommodation surety receives relatively more protection from courts.
• D)An accommodation surety is secondarily liable for the payment of the debt.

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Definitions:

Collecting Cash

The process of receiving cash, usually from customers, as payment for goods or services or as repayment of obligations.

Cash Flows

The total amount of money being transferred into and out of a business, especially affecting its liquidity.

Financial Statements

Summarized records of a company's financial activities over a specific period, including income statement, balance sheet, statement of cash flows, and statement of changes in equity.

Operating Activities

Operating activities involve the day-to-day functions of a business related to producing and selling its goods or services, reflected in the cash flows from operating activities in financial statements.