CFA Practice Question

There are 89 practice questions for this study session.

CFA Practice Question

"Off-balance-sheet financing" occurs when:
A. a firm has liabilities that are reported in the equity section.
B. a firm has liabilities that are not reported as a liability on the balance sheet.
C. a firm has receivables that are not reported as a receivable on the balance sheet.
Explanation: Off-balance-sheet financing is where the firm has a liability but is not required to report it on the balance sheet as a liability.

User Contributed Comments 2

User Comment
CoffeeGirl OBS: liabilities not recorded on balance sheet
1. sales of receivable to 3rd party
2. take or pay and throughput arrangement. buy min of raw mateiral
3. finance subsidiaries: not allowed now.
4. commodity linked bonds: finance with debt with some underlying commodity. periodic re-valuation
5. joint-venture
6. investment in affiliates
bruno5104 Thanks!!
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