Which of the Following Statements Is False with Respect to Debt

question 55

Multiple Choice

Which of the following statements is false with respect to debt factoring?

• A)it can be seen as an indication that the business is in healthy financial shape.
• B)it outsources control of accounts receivable to specialists in collection and credit.
• C)it provides a quicker source of cash than waiting for customers to pay.
• D)all of the above.

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Definitions:

Current Liability

A liability that is expected to be paid off within a year's time or within the normal operating cycle of a business.

Short-Term Obligation

Debt or financial obligations due within one year.

Payroll Taxes

Taxes imposed on employers or employees, and are usually calculated as a percentage of the salaries that employers pay their staff.

Employee

An individual who works part-time or full-time under a contract of employment, contributing labor and expertise to an employer.