Applegate Company Experienced an Accounting Event That Affected Its Financial

question 85

Multiple Choice

Applegate Company experienced an accounting event that affected its financial statements as indicated below: Which of the following accounting events could have caused these effects on Knight's statements?

• A) paid interest and principal on loan
• B) borrowed funds through a line of credit
• C) paid interest on bonds
• D) repaid principal on bonds at maturity

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Definitions:

Cash Flow Management

The process of monitoring, analyzing, and optimizing the net amount of cash receipts minus cash expenses in a business.

Accounts Receivable

Funds that customers owe to a business for products or services already provided but not yet compensated for.

Net Profit Margin Ratio

A financial metric indicating the percentage of revenue remaining as profit after all expenses, taxes, and costs have been deducted.

Cash Flow

The total amount of money being transferred into and out of a business, especially as affecting liquidity.