Consider this hypothetical scenario: You decided to open and manage a shoe store, and used credit to buy sneakers from the company, Nike, in order to sell those sneakers to the public. At this moment, you now have the sneakers purchased from Nike. However, you have not paid Nike. You plan to pay Nike later. On your store's balance sheet, the money you owe Nike is listed as: O A. Risk/return trade-off. OB. Debt to owner's equity. OC. Collateral. O D. Accounts payable. QUESTION 26 Which type of companies are obligated to abide by and use the generally accepted accounting principles? Choose the best answer. O A. Private. B. Publicly traded. OC. Non-profit. D. Insurance company. QUESTION 27 A company must comply with the rules of _____ in order to sell bonds or stocks? O A. FASB. B. Federal Reserve. OC. SEC. OD. The corporation itself. Sometimes a company may not be able to operate its business just from the money it earned from selling its good and services. Therefore, it is not unusual for a company to get money in another manner, in order to operate its business. The act of getting the money in this other manner is called if the company is not required to pay for the money its obtained (choose the answer that best describes this situation). OA. Unsecured loan financing. OB. Equity financing. OC. Secured loan financing, OD. Trade crediting. QUESTION 29 The fundamental accounting equation is, "Assets = Liabilities + Owners' Equity." How can you change the equation, so "Owners' Equity" is by itself on one side of the equal sign? O A. Assets - Liabilities = Owners' Equity. B. Liabilities divided by Assets = Owners' Equity. OC. Liabilities - Assets = Owners' Equity. OD. The fundamental accounting equation cannot be changed. QUESTION 30 Before a bank provides credit to a company to help that company finance its operations, which of the following is not something the bank will likely consider: O A. How the company applies the bank's compliance-based ethics code. B. The type of industry in which the company operates. OC. If the company has collateral to offer. D. The health (good or bad) of the economy