Kelley's Kloset, LLC, Has Applied for a Business Loan

question 114

Multiple Choice

Kelley's Kloset, LLC, has applied for a business loan. Her prospective banker has requested information concerning the financial condition of her business. Which accounting discipline is responsible for providing accounting information to outside stakeholders?

• A) Management accounting.
• B) Financial accounting.
• C) Tax accounting.
• D) Certified bookkeeping.

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Definitions:

Partially Amortized

A loan repayment plan where the total sum borrowed is not fully paid off by the end of the loan term, leaving a lump sum due as a "balloon payment."

Net Advantage

The quantitative benefit or gain derived from a particular decision or action, after considering all related costs and disadvantages.

Leasing

A financial arrangement where one party allows another to use an asset for a period of time in exchange for payment.

NPV

Net Present Value, a calculation used to determine the present value of an investment by the sum of its future cash flows minus the initial investment.