Perform a Horizontal Analysis for the Balance Sheet Entry "Accounts

question 116

Multiple Choice

Perform a horizontal analysis for the balance sheet entry "Accounts Receivable" given below. (Round to the nearest tenth) $$\begin{array} { l l l l } \hline \text { Assets } & \mathbf { 2 0 1 2 } & \mathbf { 2 0 1 1 } & \begin{array} { l } \text { Increase/Decrease } \\\text { Amount Percent }\end{array} \\\hline \text { Current Assets } & & \\\text { Cash } & \$ 33,700 & \$ 43,500 \\\text { Accounts Receivables } & 40,000 & 40,800 \\\text { Merchandise Inventory } & 41,300 & 35,500 \\\text { Supplies } & 5,300 & 3,300 \\\text { Total Current Assets } & 120,300 & 123,100 \\\text { Property, Plant, and Equipment } & & \\\text { Machinery and Equipment } & 30,700 & 37,100 \\\text { Total Assets } & \$ 151,000 & \$ 160,200 \\\hline\end{array}$$

• A) (2.0%)
• B) (19.6%)
• C) (3.5%)
• D) (8.9%)

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Definitions:

Cash Flow Hedge

A financial instrument intended to offset potential losses or gains that could be incurred by future cash flows, acting as a buffer against currency, interest rate, or commodity price changes.

Forward Exchange Contract

A financial derivative that locks in the exchange rate at which a currency can be bought or sold on a future date.

Fair Value Hedge

A hedge of the exposure to changes in fair value of a recognized asset or liability or an unrecognized firm commitment, or an identified portion of such an asset, liability, or firm commitment, that is attributable to a particular risk and could affect profit or loss.

Local Currency Units

The monetary units issued by a country's central bank, used as the standard for financial transactions within that country.