At the End of October, Flagship Marina Received a Bill

question 8

Multiple Choice

At the end of October, Flagship Marina received a bill for fuel used in October. Payment is not due until November 30. This transaction:

• A) Should not be recorded in the accounting records until November.
• B) Causes a decrease in assets and in equity in November, when the bill is paid.
• C) Should be recorded as an expense of October, regardless of the payment date.
• D) Is recorded as a liability in October, but is not considered an expense until paid.

Analyze and interpret financial statements for decision-making.

Calculate consolidated retained earnings and understand its implications.

Prepare Plax Inc.'s Consolidated Statement of Financial Position.

Understand the effects of intercompany transactions and their elimination in consolidated statements.

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Definitions:

Common Stock

A type of equity security that represents ownership in a corporation, with holders typically having voting rights and receiving dividends.

Financing Activities

Financing activities are transactions and business events that involve raising capital and repaying investors, affecting a company's equity and liabilities.

Long-term Debt

Borrowings and financial obligations that are due more than one year in the future, often used for financing or acquiring assets.

Stock Options

Contracts that give the holder the right, but not the obligation, to buy or sell a specified amount of stock at a predetermined price within a set time period.