Recognizing a Loan Received as Revenue Instead of as a Liability

question 8

Multiple Choice

Recognizing a loan received as revenue instead of as a liability has a positive effect on the reported financial statements for all of the following except:

• A) It understates liabilities.
• B) It overstates revenues.
• C) It overstates net income.
• D) It overstates assets.

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Definitions:

Pollution Prevention Pays

A principle that emphasizes the economic benefits of reducing or eliminating waste and pollutant production at the source, rather than dealing with their consequences later.

3M Company

An American multinational conglomerate known for its range of products including adhesives, abrasives, and laminates.

Low-Waste Approach

A strategy or lifestyle choice focusing on reducing the amount of waste generated by adopting practices like reusing, recycling, and choosing products that are made to last.

Built-In Obsolescence

is a design policy for products that ensures they become outdated or non-functional after a certain period, encouraging consumers to purchase new items.