If the Following Facts Were Known,which One Would Strengthen the Argument

question 9

Multiple Choice

If the following facts were known,which one would strengthen the argument that a company will be able to meet its current financial obligations?

• A) The level of accounts payable is high.
• B) Liabilities exceed assets.
• C) The company currently has a negative cash flow.
• D) The company needs to increase the number of customers it serves.
• E) Assets exceed liabilities.

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Definitions:

Permanent/Temporary

Defines classifications of accounts in accounting where permanent accounts refer to balance sheet items that carry over into the next fiscal period, while temporary accounts are closed at the end of each accounting period.

Normal Balance

The side (debit or credit) of an account that is expected to have a higher balance, indicating the account’s increase.

Financial Statement(s)

Comprehensive reports created to present a company's financial performance, financial position, and cash flows over a specific period.

Permanent/Temporary

Categories used to differentiate items or statuses that are either enduring without significant change or existing for a limited time, respectively.