Paying an amount on account reducesOa.a. stockholders' equity.O b. the amount owed on a liability.O c. net income.O d. an expense.6Four companies and their ratio of liabilities to stockholders' equity are as follows:0.88Fred Company0.44Yabba Company1.22Dabba Company0.66Doo CompanyTo which company would a supplier be most eager to extend credit?O a. Dabba CompanyO b. Doo CompanyO c. Fred CompanyO d. Yabba Company

The liabilities to stockholders' equity ratio represents the obligation of the company as compared…

Answered: Paying an amount on account reduces

Business

Accounting

Paying an amount on account reduces

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter6: Cash And Receivables

Section: Chapter Questions

Problem 13GI

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Concept explainers

Bookkeeping

Bookkeeping is the process of recording the financial transactions of a company on a regular basis. With the process of bookkeeping, companies can track important financial information that helps management in making crucial decisions.

Question

Paying an amount on account reduces
Oa.
a. stockholders' equity.
O b. the amount owed on a liability.
O c. net income.
O d. an expense.
6
Four companies and their ratio of liabilities to stockholders' equity are as follows:
0.88
Fred Company
0.44
Yabba Company
1.22
Dabba Company
0.66
Doo Company
To which company would a supplier be most eager to extend credit?
O a. Dabba Company
O b. Doo Company
O c. Fred Company
O d. Yabba Company

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