In a Trend Analysis of K Company, Which of These

question 42

Multiple Choice

In a trend analysis of K Company, which of these changes appears to be the most significant in requiring further investigation?

• A) An increase of 13% in revenues.
• B) An increase of 11% in bad debts written off.
• C) An increase of 7% in total assets.
• D) An increase of 8% in accounts receivable.

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Definitions:

Cash Receipts

Records of all cash amounts received by a company, documenting sales, returns, and other transactions involving cash inflows.

Cash Payments

Monetary transactions where cash is used to settle the amount owed for purchases or expenses.

Note Payable

A written promise to pay a specified amount of money, usually with interest, by a certain date to the holder of the note.

Journal Entry

A record of the transactions that occur within a company, entered into the accounting ledger reflecting debits and credits in order to maintain accurate financial statements.