Which Statement Is Correct

question 91

Multiple Choice

Which statement is correct?

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

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Definitions:

Departmental Contribution

The amount of revenue contributed by a specific department after deducting its direct and indirect costs.

Overhead

Refers to the indirect costs required to operate a business, such as rent, utilities, and administrative expenses, not directly tied to the production process.

Controllable Costs

Expenses that a manager or business can influence or manage through decisions and actions.