What Issue Would Be of Most Concern on Behalf of Banks

question 7

Multiple Choice

What issue would be of most concern on behalf of banks or other creditors of Manchester Technology?

• A)Prepaid insurance decreased 62.5%.
• B)The current portion of long-term notes payable increased by 300%.
• C)Accounts receivable increased 20%.
• D)Fixed assets decreased 9%.
• E)Total liabilities increased 7%.

---

Definitions:

Common Stock

A kind of stock that signifies having a stake in a company, accompanying the power to vote and the possibility of receiving dividends.

Stockholders' Equity

After liabilities are removed, what remains of the assets in a corporation, indicating an ownership share.

Liabilities

Financial obligations or debts that a company owes to outside parties, which must be settled over time through the transfer of economic benefits.

Assets

Resources owned by a company that have economic value and can be used to meet debts or commitments.