Why are bankers interested in the income statement of a business to which they loan money?
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- 1. Define Revenue. 2. What is an expense? 3. What is the purpose of an expense? 4. What is net income? 5. What is a net loss? 6. Why are owners interested in the income statement? 7. Why are bankers interested in the income statement of a business to which they loan money? 8. Why would investors provide a business with cash? 9. Why must a business provide an income statement to the governmen? 10. tWhy are drawings not included in the income statement?What is net income? What is a net loss? Why are owners interested in the income statement? Why are bankers interested in the income statement of a business to which they loan money? Why would investors provide a business with cash? Why must a business provide an income statement to the governmen? tWhy are drawings not included in the income statement?Why would a loan officer at a bank or a potential investor in the business prefer reading a multiple-step formatted Income Statement versus a single-step formatted Income Statement?
- which of the following is an operating avtivity? A. billing customers for services rendered but not yet paid for B. paying off a loan to the bank C. purchasing equipment for cash D. receiving cash investments from ownersWhich one of the following is not a nominal account?A. purchases accountB. sales accountC. salaries accountD. cash account Which one of the following is a characteristic of a valid business transaction? A. It is an event measurable in terms of money B. It affects the financial position of the business C. It should be supported by a source document D. All of the aboveA bank loan approved for the business that has been paid into the bank account will have the following impact on the accounting equation. Group of answer choices Increase equity and increase asset Decrease an asset and decrease a liability Decrease an asset and decrease stockholders’ equity Increase an asset and increase a liability
- What is the effect on the fundamental accounting equation if supplies are purchased on account? How will the fundamental accounting equation change if supplies are purchased with cash? Explain how this purchase will or will not change the owners equity.What is the effect on the accounting equation when a business pays the balance due on accounts payable?A business provider services to a customer on credit.Which of the following is correct: A.Assets increase and liabilities decrease at the time the cash is collected B.Assets increase and liabilities increase at the time of the sale C.Assets increase and the owner's equity increases at the time the cash is collected D.Assets increase and the owner's equity increases at the time of the sale
- Studying GAAP Accrual accounting. There is also cash-basis accounting which does not comply with GAAP. Distinguish between cash-basis accounting and accrual-basis accounting. Why is accrual-basis accounting acceptable for most businesses and the cash-basis unacceptable in the preparation of an income statement and a balance sheet?The practice of accounting provides investors and lenders with the quantitative information they rely on to make business decisions. O True False8. Which one of the following is an item of owners' equity? Bank loan Suppliers' monetary claims Prepaid expenses Earnings generated by the entity ts
