Which One of the Following Statements About Venture Capitalists Is

question 26

Multiple Choice

Which one of the following statements about venture capitalists is not correct?

• A)Venture capitalists contribute to equity financing rather than make loans.
• B)Venture capitalists are passive investors.
• C)Most private venture capitalists are organized as limited partnerships.
• D)The federal government licenses some private firms to provide lower-cost funds to entrepreneurs.
• E)Angel venture capitalists are wealthy individuals who fund business start-ups.

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Definitions:

Temporary Difference

A difference that arises between the tax bases of assets or liabilities and their carrying amount in the financial statements, which will result in taxable or deductible amounts in future years.

Bad Debts Expense

The cost to a company resulting from the inability to collect a receivable because a customer is unable to fulfill their payment obligations.

Product Warranty Costs

Expenses incurred by a company due to repairing or replacing products that fail to perform satisfactorily within a given warranty period.

Operating Loss

A situation where a company's operating expenses exceed its revenues, indicating it is not making a profit from its core activities.