Because audited financial statements are __________ to prepare, restrictive covenants rarely appear in loan contracts to companies with __________ than $1 million in assets.
A) inexpensive; more
B) inexpensive; less
C) expensive; more
D) expensive; less

Question

Quizplus · Accepted Answer

Audited financial statements are expensive to prepare, and it's less common for restrictive covenants to appear in loan contracts to smaller companies (those with less than $1 million in assets) because the cost and effort of preparing such statements might not be justified for smaller entities.

Because Audited Financial Statements Are __________ to Prepare, Restrictive Covenants