Question

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44. Leah Co. had the following ratio information: Current Year Prior Year Inventory Turnover 5.5 6.3 Accounts Receivable Turnover 13.3 14.1 Which of the following is false a) Leah Co may be experiencing a decline in the quality of credit customers b) Leah Co. has improved their liquidity c) It is taking Leah Co. longer to collect cash from accounts receivable d) Leah Co is becoming less efficient at selling its inventory 45. How are long-term fixed assets typically reported? a) On the income statement at fair value b) On the balance sheet at fair value c) On the income statement at original cost d) On the balance sheet at book value 46. Below is information for Saddis & Co: Profit Margin Asset Turnover ROA 9.3% 0.67 6.23% Which of the following is true if Saddie & Co. wishes to increase their ROA? a) The company should decrease asset turnover b) The company should increase the cost of its products c) The company should increase the amount of assets it has d) The company should increase the selling price of its goods or services 47. According to Ethics Insight- I felt the Pressure, which of the following is incorrect? a) Employees were instructed by the CFO to create invoices that they know would not be sent to clients b) Management referred to the financial manipulation as "fake income" c) Auditors were intentionally given false information d) Employees were incentivized to inflate income to reach goals so they could earn their annual bonus 48. Which of the following options would all appear on a company's income statement? a) Cash, Accounts receivable, service revenue b) Service revenue, sales revenue, interest expense c) Advertising Expense, Cost of Goods Sold, Dividends d) Accounts receivable, sales revenue, accounts payable e) Cost of goods sold, inventory, sales revenue 49. What is an example of a current asset? a) Accounts receivable b) Land c) Buildings d) Equipment

Answer 1

Solution 44 Higher the Inventory turnover and accounts receivable turnover is much betteer. Conclusion Basis above discussion both of the ratios are declining, hence the correct option is "b) Leah Co. has improved their liquidity" Solution 45 Long term assets typically reported at the book value in balance sheet. Conclusion Hence the correct option is "D) On the balance sheet at book value" Solution 46 To increase the ROA the compnay must increase the selling price of its good and services Conclusion Hence the correct option is "D) the company should increase the selling price of its goods and services". Solution 47 The correct option would be "Employees were incentivized to inflate income to reach goals so they could earn their annual bonus"

Solution 48 The following wwould appear on the company's income statement: b) Service revenue, sales revenue, interest expense Solution 49 Accounts receivable is na example of Current assets Conclusion Hence the correct option is A) Accounts receivable