Which of the Following Observations Is NOT Correct

question 86

Multiple Choice

Which of the following observations is NOT correct?

• A)Most loans are sold with recourse.
• B)Loan sales are a primitive substitute for securitization.
• C)Selling of a loan creates a secondary market for loans.
• D)Ownership of the loan is always transferred to the loan purchaser.

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Definitions:

Cash Receipts

The collection of cash during a specific time period, typically from sales or other transactions.

Unearned Revenues

Funds received by a company for goods or services that have not yet been delivered or rendered, considered a liability until the product or service is provided to the customer.

Liabilities

Liabilities that a business must settle in the future, representing the financial debts owed to external parties.

Prepaid Expenses

Costs that have been paid in advance for goods or services to be received in the future.