Which of These Is Not a Reason a Business Would

question 1

Multiple Choice

Which of these is not a reason a business would be prepared to accept a bill of exchange in settlement of a debt?

• A) If a legal dispute arises the bill represents a legal, written acknowledgment of the debt and its amount.
• B) Because a bill of exchange has government backing.
• C) A bill is interest-bearing and thereby produces interest for the business granting credit.
• D) A bill is more easily converted into cash than accounts receivable.

---

Definitions:

Provincial Tax Brackets

Tax levels set by provincial governments, where income tax rates vary based on the income bracket a taxpayer falls into.

Operating Cash Flow

Money generated from the ordinary operations of a company.

Depreciation

The systematic allocation of an asset's cost over its expected useful life to account for its loss of value over time.

Tax Rate

The division of one's or a company's income that is allotted by the government for tax purposes.