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Question
Operating leases are financial statement examples of off -balance sheet financing.
Answer
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Because covenant compliance can be jeopardized by mandated changes in accounting principles, many loan agreements have financial covenants that rely on the accounting rules in place when the loan is first granted.
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Financial covenants establish minimum financial tests with which a borrower must comply.
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A. High earnings per share.
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C. long-term incentives.
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C. negative restrictions.
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B. borrowers.
C. both lenders and borrowers.
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D. many business relationships.
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A. the consignor.
B. the consignee.
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D. neither the consignor nor the consignee.