Question 5 of 50 What mathematical complication is introduced by using loans payable as...
50.1K
Verified Solution
Link Copied!
Question
Accounting
Question of
What mathematical complication is introduced by using loans payable as the "plug"?
Changing the amount of loans payable requires changing the amount of paidin capital, which changes the amount of dividends and thus changes the amount of the "plug."
Changing the amount of loans payable requires changing the amount of investments, which changes the total asset balance and thus changes the amount of the "plug."
Changing the amount of loans payable requires changing the amount of interest expense, which changes the retained earnings balance and thus changes the amount of the "plug."
Changing the amount of loans payable requires changing the amount of accounts payable, which changes the inventory and cost of goods sold balances and thus changes the amount of the "plug."
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
