Super Corp. has an acid test ratio 1.5 to 1.0 which of the following will cause this ratio to deteriorate? a. Payment of cash dividends previously declared. b. Borrowing short term loan from a bank. c. Sale on inventory on account. fd. Sale of equipment at a loss.
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Super Corp. has an acid test ratio 1.5 to 1.0 which of the following will cause
this ratio to deteriorate?
a. Payment of cash dividends previously declared.
b. Borrowing short term loan from a bank.
c. Sale on inventory on account.
fd. Sale of equipment at a loss.
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- 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 investmentsats Which of the following would cause a company's current ratio to increase? The sale of a building for cash The sale of inventory for cash Paying off long term debts with cash. Selling inventory on credit.. None of the above.Which of the following statement is correct? Select one: O a. Return on assets is the ratio of net income after interest expense to total assets O b. All options are correct statement C. Average collection period is the average number of times it takes for the company's customers to pay their bills o d. Increase in the debt ratio indicate more reliance on debt as a source of financing
- 22. Which situation indicates a loss on the income statement when preparing worksheet?A. Total debits equal total credits.B. Total credits exceed total debitsC. Total debits exceed total creditD. None of the choices 23. Which of the following is not shown in the Balance Sheet?A. RevenueB. CashC. LandD. Accounts Payable 24.In which columns of a worksheet would the adjusted balance of accumulated depreciation appear?A. Adjusted trial balance credit, Balance Sheet debit.B. Adjusted trial balance credit, income statement creditC. Adjusted trial balance debit, balance sheet debitD. Adjusted trial balance credit, balance sheet credit 26. If total credits exceed total debits in the Balance Sheet columns of a worksheet:A. A loss has occurred.B. A mistake has been made.C. A profit has occurredD. No conclusion can be drawn. 27. The components of the balance sheet equation are:A. Assets, income and owner's equity.B. Assets, liabilities and owner's equity.C. Income, expenses and profit.D.…Which of the following transactions would cause the current ratio to increase (assumingthe current ratio is currently greater than 1)?a. Purchased inventory on credit.b. Purchased property, plant, and equipment for cash.c. Received money from a customer related to an accounts receivable.d. Paid off a payable.Indicate the section of an income statement in which each of the following is shown.a. Loss on inventory write-down. b. Loss from strike.c. Bad debt expense.d. Loss on disposal of a discontinued business. e. Gain on sale of machinery.f. Interest expense.g. Depreciation expense.h. Interest revenue
- A corporation has a current ratio of 2 to 1 and a quick ratio (acid test) of 1 to 1. A transaction that would change the quick ratio but not the current ratio is the A.Collection of accounts receivable. B.Payment of accounts payable. C.Purchase of a patent for cash. D.Sale of inventory on account at cost.Other things held constant, which of the following will DECREASE the current ratio, assuming an initial current ratio greater than 1.0? a. Machinery is purchased using cash b. Inventory is sold at cost for cash c. Accounts payables are paid with cash d. Machinery is purchased using cash & Accounts payables are paid with cash e. None of these1. While reviewing a trial balance, you notice the following account balances. Which one is likely to be an error? a. Inventory with a debit balance of $43,000 b. Discount on Bonds Payable with a debit balance of $4,000 c. Accumulated Depreciation with a debit balance of $8,000 d. Allowance for Doubtful Accounts with a credit balance of $23,000 2. Debiting an insurance payment to Rent Expense instead of Insurance Expense is an example of... a. an accrual error b. a deferral error c. a classification error d. use of an incorrect accounting principle 3. InCo. recorded a customer's $20,000 check as a $20,000 debit to Cash and as a $2,000 credit to Accounts Receivable. This is an example of: a. an oversight b. an incorrect account classification c. a transposition error d. a slide error 4. During a bank reconciliation, a deposit recorded by the bank but not in the company's ledger Cash account is... a. added to both the bank balance and the ledger Cash account balance b. added to the…
- What is the primary purpose of the Statement of Affairs ? a. To determine how much is owed by the customers b. To determine the amount for the owners equity c. To determine how is left in the bank account d. To determine if there was a gain or loss on disposal The term Margin is determined by which of the following operations? a. Adding all the incomes b. Dividing gross profit by sales c. Subtracting expenses from sales d. Multiplying capital by a decimal The Sandy Bay is a trader in sand. On December 31, 2010 the closing inventory was completely destroyed by flood rains. The following information is available: (1) Inventory at December 1, 2010 at cost $31,400 (2) Purchases for December 2010 $55,600 (3) Sales for December 2010 $88,800 (4) Standard mark-up is 25% Based on this information, what was the value of the closing inventory? a. $15,960 b. $17,760 c. $20,400 d. $25,800…Which 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.True or False. 37. Horizontal analysis is the financial analysis technique that compares the balances of two accounts in one reporting period. * 21. The SoCE is prepared to help the readers understand the transactions that affected the balances of the drawing and equity accounts. * 19. The cost of transporting the merchandise purchased by the company is a reduction from the cost or merchandise purchased. * 32. Cash payment for bank loans are reported under cash flows from operating activities. *