Discretionary Financing Needs Will Be Lower If ________

question 46

Multiple Choice

Discretionary financing needs will be lower if ________.Assume "all else equal."

• A) the dividend payout ratio is raised
• B) the firm's net profit margin increases
• C) sales increase
• D) fixed assets are currently at full capacity

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Definitions:

Adjusting Entry

A journal entry made at the end of an accounting period to allocate income and expenditures to the correct periods.

Supplies Account

An account that tracks the cost of supplies used or on hand during an accounting period.

Inventory

The total amount of goods held by a company for the purpose of resale or production.

Adjusting Journal Entry

An accounting record made to amend the preliminary financial statements towards the accrual basis of accounting, ensuring all revenues and expenses are recorded in the correct period.