Why would ratios that include one balance sheet account and one income statement account such as receivable turnover or return on assets, be questionable if they came from quarterly or other interim financial reports? (4%)
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b. Why would ratios that include one
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- Develop brief answers to each of the following questions: 1. Why does a decrease in receivable turnover create the need for cash from operating activities? 2. Why would ratiosthat include one balance sheet account and one income statement account, such as receivable turnover or return on assets, be qu estionable if they came from quarterly or other interim financial reports?Why does a decrease in receivable turnover create the need for cash from operating activities? (4%)b. Why would ratios that include one balance sheet account and one income statement account such as receivable turnover or return on assets, be questionable if they came from quarterly or other interim financial reports?- Why does a decrease in receivable turnover create the need for cash fromoperating activities? - Why would ratios that include one balance sheet account and one incomestatement account such as receivable turnover or return on assets, bequestionable if they came from quarterly or other interim financial reports?
- Compute the missing amounts on the company’s financial statements. (Hint: What’s the difference between the acid-test ratio and the current ratio?)4. Net Income5. Accounts receivable, net6. CashThe regular financial statements in which every line has been divided by the sales for the year. A. income statement B. No choice given C. cash flow statement D. common size statement E. balance sheetWhich of the following is the incorrect effect of counterbalancing errors?a. None of the statements is incorrect. b. The statement of financial position at the end of the first period is incorrect. c. The income statements for three successive periods are incorrect. d. The statements of financial position at the end of the second period is correct.
- Which of the following would not result in an increase in both the current ratio and the acid-test ratio? A. Increase in inventory B. Increase in accounts receivable C. Increase in cash D. Increase in current investmentsWhich of the following is included in the numerator of the Acid-Test Ratio calculation (check all that apply) A. Supplies B. Net Current Receivables C. Short-Term Investments D. Merchandise Inventory Which of the following ratios helps measure a company's ability to pay its current liabilities? (check all that apply) A. Accounts Receivable Turnover B. Days' Sales in Inventory C. Acid Test Ratio D. Cash RatioWhich of the following assumptions is embodied in the AFN equation? a. All balance sheet accounts are tied directly to sales. b. Common stock and long-term debt are tied directly to sales. c. Last year's total assets were not optimal for last year's sales. d. Fixed assets, but not current assets, are tied directly to sales. e. Accounts payable and accruals are tied directly to sales.
- Which of the following events will cause a company’s current ratio to decrease? a. The sale of inventory for credit (accounts receivable) b. Issuing stock for cash c. The sale of inventory for cash d. Paying off long-term debt with cashGiven the following ratios for four companies, whichcompany is least likely to experience problems paying itscurrent liabilities promptly?Current Ratio Receivables Turnover Ratioa. 1.2 7.0b. 1.2 6.0c. 1.0 6.0d. 0.5 7.0Bristax Corporation recorded $1,385,660 in credit sales for the year, and $732,410 in accounts receivable. The uncollectible percentage is 3.1% for the income statement method and 4.5% for the balance sheet method. A. Record the year-end adjusting entry for 2018 bad debt using the income statement method. B. Record the year-end adjusting entry for 2018 bad debt using the balance sheet method. C. Assume there was a previous debit balance in Allowance for Doubtful Accounts of $20,550; record the year-end entry for bad debt using the income statement method, and then the entry using the balance sheet method. D. Assume there was a previous credit balance in Allowance for Doubtful Accounts of $17,430; record the year-end entry for bad debt using the income statement method, and then the entry using the balance sheet method.