Paying the Principal on a Note Plus Interest Would

question 3

Multiple Choice

Paying the principal on a note plus interest would:

• A) increase total liabilities.
• B) decrease total assets.
• C) increase owner's equity.
• D) B and C could be correct.

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Definitions:

Budgets

Financial plans that outline expected revenues and expenditures for a specific period, guiding spending and investment decisions.

Bottlenecks

Restrictions in a production process that limit throughput, often leading to delays and reduced production efficiency.

Production Budget

A detailed plan showing the number of units that must be produced during a period in order to satisfy both sales and inventory needs.

Direct Materials Budget

A detailed plan showing the amount of raw materials that must be purchased to fulfill the production budget and to provide for adequate inventories.