Which Statement Is Not Correct

question 95

Multiple Choice

Which statement is not correct?

• A)Factoring with recourse creates a liability on the balance sheet.
• B)Factoring with recourse reduces a current ratio that is >1.
• C)Factoring with recourse negatively impacts working capital.
• D)Factoring without recourse reduces a current ratio that is >1.

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Definitions:

Healthy People

Individuals or populations that possess a state of complete physical, mental, and social well-being, not merely the absence of disease or infirmity.

Lemons Problem

A term in economics used to describe the issue of quality uncertainty in a market where sellers have more information about the product quality than buyers, leading to adverse selection.

Adverse Selection

A situation where asymmetric information leads to the selection of undesirable risks by one party in a transaction, often seen in insurance and financial markets.

Moral Hazard

When a party whose actions are unobserved can affect the probability or magnitude of a payment associated with an event.