Perform a Vertical Analysis for the Balance Sheet Entry "Accounts

question 47

Multiple Choice

Perform a vertical analysis for the balance sheet entry "Accounts Receivable" given below. (Round to the nearest tenth) $$\begin{array} { | l l | } \hline \text { Assets } & \\\hline \text { Current Assets } & \$ 23,000 \\\text { Cash } & 16,000 \\\text { Accounts Receivables } & 50,000 \\\text { Merchandise Inventory } & 2,500 \\\text { Supplies } & 91,500 \\\text { Total Current Assets } & \\\text { Property, Plant, and Equipment } & 23,000 \\\text { Machinery and Equipment } & \$ 114,500 \\ \text { Total Assets } &\\\hline\end{array}$$

• A) 14.6%
• B) 13.8%
• C) 17.7%
• D) 14.0%

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Definitions:

Business Transactions

Financial activities that impact a company's financial standing and are documented in its financial records.

Increase

An upward movement in quantity, size, value, or any other measure, indicating growth.

Decrease

A reduction in size, quantity, or degree of something.

Accrual Accounting

An accounting method where revenue and expenses are recorded when they are earned or incurred, regardless of when cash is exchanged.