Which of the Following Is Not a Decision That External

question 69

Multiple Choice

Which of the following is not a decision that external stakeholder's of a company's financial information would make?

• A) whether or not to extend credit to the company
• B) whether or not to hold the company's stock
• C) whether or not the company should add a new product line
• D) whether or not to ask for an increase in employees' benefits during union contract negotiations

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Definitions:

Journal Entries

Records in accounting that document financial transactions in the books of account, showing the debit and credit of each transaction.

Dividends

Payments made by a corporation to its shareholders from its profits or reserves.

Balance Sheet Errors

Mistakes that occur in the preparation of the balance sheet, including misclassifications, incorrect amounts, or omitted transactions.

Retained Earnings

The portion of a company's profits that is kept or retained rather than distributed to shareholders as dividends, typically used for reinvestment.