Selected Data from the Financial Statements Are Provided Below

question 167

Multiple Choice

Selected data from the financial statements are provided below:

-Refer to Rags to Riches. Which of the following would result from a horizontal analysis of the company's income statement?

• A)Net sales in 2020 increased to 140.74% of the 2019 amount.
• B)Gross profit is 57.9% of net sales for 2020.
• C)Accounts receivable is 13.3% of total assets in 2020.
• D)The accounts receivable turnover ratio is 7.76 in 2020.

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Definitions:

Pre-closing Trial Balance

A financial report listing all the account balances in the general ledger before adjusting entries are made for the preparation of financial statements.

Closing Entries

The accounting process of transferring temporary account balances to permanent accounts at the end of an accounting period.

Journalizing

The process of recording transactions in a journal before they are posted to ledger accounts.

Posting Closing Entries

The process of transferring the balances of temporary accounts to permanent accounts at the end of an accounting period to prepare the books for the next period.