Which of the Following Is True of Off-Balance-Sheet Activities

question 177

Multiple Choice

Which of the following is true of off-balance-sheet activities?

• A)They involve generation of fees without exposure to any risk.
• B)They include contingent activities recorded in the current balance sheet.
• C)They invite regulatory costs and additional "taxes."
• D)They have both risk-reducing as well as risk-increasing attributes.

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Definitions:

Variable Cost

Outlays that adjust according to the quantity of production or level of output.

Administrative Office

The part of an organization responsible for management and support tasks, such as finance, HR, and general administration.

Lease Cost

The expense incurred for renting a property, equipment, or facility under a lease agreement.

Sales Volume

Sales volume refers to the total number of units of a product or service sold by a company within a specific time period.