Select the Letter of the Effect on the Ratios (A

question 97

Essay

Select the letter of the effect on the ratios (a through c) as a result of each transaction listed in items 1 through 16.
____ 1. Purchased supplies on account to be used next month.
____ 2. Paid accounts payable.
____ 3. Issued a $1,000 short-term note payable for $970.
____ 4. Amortized the discount of the short-term note payable.
____ 5. A portion of long-term debt is due next year.
____ 6. Declared cash dividends to holders of stock.
____ 7. Paid the cash dividend previously declared.
____ 8. Received money from customer prior to delivery of the product to the customer.
____ 9. Delivered product to a customer who previously paid for that product.
____ 10. Collected sales tax on behalf of the state government.
____ 11. Accrued payroll taxes the firm has to pay to the federal government within three months.
____ 12. Paid a bonus (not previously accrued) amounting to 5% on reported income to the CEO for the current year.
____ 13. A large payment is remotely probable resulting from a lawsuit filed against the firm.
____ 14. A large payment is reasonably probable resulting from a lawsuit filed against the firm.
____ 15. A $10,000 payment is highly probable resulting from a lawsuit filed against the firm.
____ 16. Bondholder converted bond into stock through conversion feature.

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Definitions:

Established Dependency

A condition in which an individual relies on a substance or activity to function normally, having developed a physical or psychological need.

Higher Levels of Learning

Advanced stages of acquiring knowledge and skills, involving critical thinking, problem-solving, and the ability to apply learned concepts in new situations.

Apply Standards

The practice of implementing established criteria or guidelines in operations, processes, or evaluations.

Implement a New Skill

The process of learning and applying a new ability or technique in practical situations.