Which of the Following Is not a Common Way That

question 61

Multiple Choice

Which of the following is not a common way that managers use the balance sheet?

• A)To analyze the balances of assets, liabilities, and stockholders' equity throughout the accounting period
• B)To determine if the cash balance is sufficient for future needs
• C)To analyze the balance between debt and common stock financing
• D)To analyze the balance of accounts receivable on the last day of the accounting period

---

Definitions:

Unused Capacity

Resources or production potential that remains unutilized or is not being used to its full extent.

Opportunity Cost

The cost of the next best alternative that is foregone when a decision is made to choose one option over others.

Cash Outlay

The actual amount of money spent by a company to purchase goods or services, as opposed to accounting estimates or accruals.

Alternative Investments

Assets that do not fall into the conventional investment categories such as stocks, bonds, and cash, examples include real estate, commodities, and hedge funds.