In a common size statement, a firm shows average receivables of 9.3%. Its receivables turnover equals 1.23.What's the average receivables collection period?
Answer(s): A
Average receivables collection period = 365/receivables turnover. In this case, the collection period = 365/1.23 = 296.8 days.
Which of the following appear(s) on the Income Statement?
Answer(s): B
Employee payroll taxes payable are a current liability.
To carry out a comparative analysis of a firm's financial statements over a period of more than 3-4 years, one should use ________.
Answer(s): D
To carry out a comparative statement analysis over a long period of time, you can express the financial statement numbers in terms of a common base. This base could be one of the years for which financial statements are available or can be arbitrarily set to a number like 100. This process then converts the financial statement quantities into indices and these can be analyzed more conveniently.
A firm's financial audit ensures all of the following EXCEPT:
It is not a financial audit function to check on the reasonableness of the risks undertaken by the institution.
The loss from an uncollectible account is:
Answer(s): C
The benefit from selling on credit to customers far outweighs the cost of losses from uncollectible accounts.These losses are a regular expense of doing business.
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