Some Companies Use Debt or Preferred Stock Financing Instead of Common

question 63

Multiple Choice

Some companies use debt or preferred stock financing instead of common stock financing.The purpose is:

• A)to retain control
• B)to facilitate record-keeping
• C)to maintain privacy
• D)to prevent audit problems

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Definitions:

Multi-Column Purchases Journal

A specialized accounting journal that records the purchase transactions of a business in multiple columns for different types of purchases.

Accounts Payable Account

An accounting entry that represents a company's obligation to pay off a short-term debt to its creditors or suppliers.

Cash Account

An account that tracks the flow of cash transactions, including receipts and payments, impacting a business's overall cash balance.

Subsidiary Ledger

A detailed ledger that provides a breakdown of individual transactions affecting a specific general ledger account, facilitating in-depth analysis and reconciliation.