Which of the following is most likely to increase the final number for notes payable for short-term borrowing needs in the pro forma balance sheet?
A) A decrease in inventory.
B) An increase in retained earnings.
C) A decrease in accounts payable.
D) A decrease in accounts receivable.

Question

Quizplus · Accepted Answer

A decrease in accounts payable means that the company is paying off its short-term debts, which would increase the final number for notes payable. A decrease in inventory (choice A) or accounts receivable (choice D) would not have a direct impact on the final number for notes payable. An increase in retained earnings (choice B) may indicate that the company has more funds available for borrowing, but it would not directly affect the final number for notes payable.

Which of the Following Is Most Likely to Increase the Final