The Primary Focus for Financial Accounting Information Is to Provide

question 116

Multiple Choice

The primary focus for financial accounting information is to provide information useful for: $\begin{array} { | l | c | c | } \hline & \text { Investing decisions } & \text { Credit decisions } \\\hline \text { a. } & \text { Yes } & \text { Yes } \\\hline \text { b. } & \text { Yes } & \text { No } \\\hline \text { c. } & \text { No } & \text { Yes } \\\hline \text { d. } & \text { No } & \text { No } \\\hline\end{array}$

• A)Investment decisions and credit decisions.
• B)Investment decisions but not credit decisions.
• C)Credit decisions but not investment decisions.

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Definitions:

Accounts Receivable

Money owed to a company by its customers from the sale of products or services on credit.

Sales Discounts

From the seller’s perspective, discounts that a seller may offer the buyer for early payment.

Normal Debit Balance

The typical balance that an account should have, where asset and expense accounts usually have debit balances.

Accounts Payable

The short-term liabilities or obligations a company owes to suppliers for goods and services purchased on credit.