Max's Tire Center Company

question 26

Multiple Choice

Max's Tire Center Company
Selected data from the financial statements of Max's Tire Center are provided below.

- Refer to the selected data provided for Max's Tire Center. Which of the following would result from a horizontal analysis of Max's balance sheet?

• A) Net sales increased by $2,300 or 10.0% during 2012.
• B) Net accounts receivable increased $12,300 or 28.47% during 2012.
• C) Net accounts receivable is 12.0% of total assets in 2012.
• D) The total assets is $462,500 in 2011.

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Definitions:

Effective Rate

The interest rate on a loan or financial product, restated from the nominal rate as an annual rate accounting for compound interest.

Interest Charged

The cost of borrowing money, calculated as a percentage of the principal amount on a loan or credit.

Semiannual Compounding

Interest calculation method where the interest is added to the principal twice a year, leading to compound interest growth.

Effective Rate

The equivalent annual interest rate when compounding at intervals different from annually. It reflects the total amount of interest paid or earned over a year.