Indicate Whether Each of the Following Statements Is True or False.If

question 45

Short Answer

Indicate whether each of the following statements is true or false.If a company made the following journal entry,
this entry would cause:
_____ a)net income to decrease.
_____ b)total assets to decrease.
_____ c)liabilities to stay the same.
_____ d)cash flows from investing activities to decrease.
_____ e)owners' equity to decrease.

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Definitions:

Letter of Credit

A financial document issued by a bank guaranteeing a buyer's payment to a seller in a transaction, effective in international trade.

Covenants

A promise by the firm, included in the debt contract, to perform certain acts. A restrictive covenant imposes constraints on the firm to protect the interests of the debtholder.

Payables

Short-term liabilities or money owed by a company to suppliers or creditors for goods and services received.

Rebate

A partial refund to someone who has paid too much money for tax, rent, or a utility, or an incentive payment to induce a particular purchase or behavior.