Which of the Following Would Result When a Company Borrows

question 72

Multiple Choice

Which of the following would result when a company borrows cash and signs a note payable due in two years?

• A)A noncurrent liability and an investing cash flow are created.
• B)A noncurrent liability and a financing cash flow are created.
• C)A current liability and an investing cash flow are created.
• D)A current liability and a financing cash flow are created.

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Definitions:

Sales Budget

A financial plan that estimates the expected revenues from sales over a specific period.

Budgeted Accounts Receivable

The forecasted amount of money owed to a business by its customers for goods or services provided on credit.

Credit Sales

Sales for which payment is not received at the time of sale but is expected to be paid at a later date.

Budgeted Accounts Receivable

Forecasted or estimated amounts that a business expects to receive from customers for credit sales.