Last Year, Which Is Used as the Base Year, a fiRm

question 264

Multiple Choice

Last year, which is used as the base year, a firm had cash of $46, accounts receivable of $132, inventory of $319, and net fixed assets of $640. This year, the firm has cash of $52, accounts
Receivable of $147, inventory of $312, and net fixed assets of $576. What is the common-base year
Value of accounts receivable?

• A) .88
• B) .90
• C) 1.11
• D) 1.13
• E) 1.18

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Definitions:

Drilling Rights

Legal permissions granted to an individual or company to explore and extract resources from the land.

Adjusting Entry

At the close of an accounting cycle, records are made in the accounting books to apportion earnings and expenditures to the actual period of occurrence.

Gallons

A unit of volume for liquid measurements in the United States, equivalent to 3.785 liters.

Mineral Rights

The legal rights to explore, extract, and sell minerals from a piece of land.