Which of the Following Is Most Likely to Increase the Final

question 34

Multiple Choice

Which of the following is most likely to increase the final number for notes payable for short-term borrowing needs in the pro forma balance sheet?

• A) A decrease in inventory.
• B) An increase in retained earnings.
• C) A decrease in accounts payable.
• D) A decrease in accounts receivable.

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Definitions:

Operating Departments

Departments within an organization that are directly involved in carrying out its primary activities or business operations.

Allocating Costs

The process of distributing expenses among various departments, products, or services based on predetermined criteria.

Service Departments

Divisions within a company that provide support and services to other departments rather than directly generating revenue.

Indirect Expenses

Costs that are not directly associated with the production of goods or services but necessary for the business to operate, like rent and utilities.