Debt Guarantees Are

question 65

Multiple Choice

Debt guarantees are:

• A) A bad business practice.
• B) Considered to be current liabilities.
• C) Recorded as liabilities even though it is highly unlikely that the original debtor will default.
• D) Considered to be contingent liabilities.
• E) Never disclosed in the financial statements.

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Definitions:

Minimum Cash Balance

The lowest amount of cash that a company or individual aims to hold in order to meet operational and transaction needs.

Net Operating Income

The profit generated from a business's core operations, excluding expenses and revenues from non-operating activities.

Estimated

Refers to approximate calculations or judgments about figures or values that are not precisely known.

Finished Goods Inventory

Inventory that consists of items that have completed the manufacturing process but have not yet been sold to customers.