What issue would be of most concern on behalf of banks or other creditors of Manchester Technology?
A)Prepaid insurance decreased 62.5%.
B)The current portion of long-term notes payable increased by 300%.
C)Accounts receivable increased 20%.
D)Fixed assets decreased 9%.
E)Total liabilities increased 7%.

Question

Quizplus · Accepted Answer

The increase of 300% in the current portion of long-term notes payable may indicate that Manchester Technology is having difficulty making payments on its debts. This could raise concerns for creditors, as it suggests a higher risk of default in the future.

What Issue Would Be of Most Concern on Behalf of Banks