The Following Information Was Provided by the Records of RST

question 174

Multiple Choice

The following information was provided by the records of RST for the annual reporting period ended December 31, 2011: $$\begin{array} { | l | l | } \hline \text { Cost of goods sold as reported on the income statement) } & \$ 170 \\\hline \text { Depreciation expense } & \$ 10 \\\hline \text { Merchandise inventory increase } & \$ 2 \\\hline \text { Goodwill amortized } & \$ 4 \\\hline \text { Accounts payable decrease } & \$ 18 \\\hline\end{array}$$ The cash paid to suppliers was:

• A) $172.
• B) $188.
• C) $190.
• D) $200.

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Definitions:

Credit Risk

The risk of loss due to a borrower's failure to make payments on any type of debt.

Liquidity Risk

The risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities.

Derecognition

The process of removing an asset or liability from a company's balance sheet because it has been disposed of or is no longer expected to provide future economic benefits.

Financial Asset

Any asset that is cash, an equity instrument of another entity, or a contractual right to receive cash or another financial asset.