Sunshine Farm Supply Following Are Selected Data from the Financial Statements of Sunshine

question 35

Multiple Choice

Sunshine Farm Supply
Following are selected data from the financial statements of Sunshine Farm Supply:
-Refer to the data for Sunshine Farm Supply.
Which of the following would not result from a vertical analysis of its balance sheet?

• A)Accounts receivable increased $22,000 or 36.7% during 2016.
• B)Accounts receivable is five times larger than Merchandise inventory in 2016.
• C)Accounts receivable is 13.3% of total assets for 2016.
• D)Merchandise inventory is 2.7% of total assets for 2016.

---

Definitions:

Business Entity

A legal organization created by individuals, stockholders, or shareholders, with the purpose of operating for profit.

Partnership Form

A type of business organization in which two or more individuals manage and operate the business in accordance with the terms and objectives set out in the Partnership Deed.

Legal Structures

Refers to the types of business entity formations available, such as sole proprietorships, partnerships, corporations, and limited liability companies, affecting legal liability and tax implications.

Business

An organization or enterprising entity engaged in commercial, industrial, or professional activities.