Which Statement Is Not Correct

question 47

Multiple Choice

Which statement is not correct?

• A)Factoring with recourse creates a liability on the balance sheet.
• B)Factoring with recourse creates a liability and receivable on the balance sheet.
• C)Factoring without recourse negatively impacts the working capital ratio.
• D)Factoring without recourse means that the seller takes the collection risk.

Understand the preparation and significance of closing entries in the accounting process.

Understand the concept and application of closing accounts and their impact on the Income Summary and Retained Earnings.

Calculate and interpret current ratio and its significance in evaluating a company's liquidity.

Differentiate between permanent and temporary accounts and their roles in accounting.

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Definitions:

Probability

A measure of the likelihood that an event will occur, often expressed as a number between 0 and 1.

Net Earnings Per Share

A financial ratio calculated by dividing the net income of a company by the average number of its outstanding shares, indicating the company's profitability per share.

Stock Price

The cost of purchasing a single share of a company's stock, reflecting the value investors place on the company.

Expected Future

Anticipated conditions or outcomes in the economy, markets, or individual financial situations, often guiding decision-making.