Selected Data from the Financial Statements Are Provided Below

question 196

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 balance sheet?

• A)Accounts receivable increased $22,000 or 57.9% during 2020.
• B)Accounts receivable is five times larger than inventory in 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:

Debits

An accounting entry that increases an asset or expense account, or decreases a liability or equity account, recorded on the left side of the ledger.

Credits

Credits are accounting entries that increase liabilities or equity accounts, or decrease asset or expense accounts.

Trial Balance

A list of all general ledger accounts and their balances at a particular time, ensuring that debits equal credits in the double-entry accounting system.

Normal Balances

The side (debit or credit) of an account that is expected to have a higher balance given the account type's role in accounting.