The Reference Column of the Accounts in the Accounts Payable

question 81

Multiple Choice

The reference column of the accounts in the accounts payable subsidiary ledger after posting may show

• A) only P references.
• B) CP P or G references.
• C) G P or S references.
• D) only CP references.

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Definitions:

M&M Proposition II

A theory proposing that the cost of equity increases as a company increases its leverage, due to the riskier equity stream.

Debt-Equity Ratio

A ratio assessing the comparative financing from equity and debt for a company’s assets.

Cost of Equity

The return a company theoretically pays to its equity investors, conceived as a compensation for taking on the risk of investing.

Break-Even Point

The point at which total revenues equal total expenses, and the business neither makes a profit nor incurs a loss.