Question $5$ of $50$

What mathematical complication is introduced by using loans payable as the "plug"?

Changing the amount of loans payable requires changing the amount of paid$-$in capital, which changes the amount of dividends and thus changes the amount of the "plug."

Changing the amount of loans payable requires changing the amount of investments, which changes the total asset balance and thus changes the amount of the "plug."

Changing the amount of loans payable requires changing the amount of interest expense, which changes the retained earnings balance and thus changes the amount of the "plug."

Changing the amount of loans payable requires changing the amount of accounts payable, which changes the inventory and cost of goods sold balances and thus changes the amount of the "plug."