Items 1 Through 6 Represent an Auditor's Observed Changes in Certain

question 13

Essay

Items 1 through 6 represent an auditor's observed changes in certain financial statement ratios or amounts from the prior year's ratios or amounts. For each observed change, select the most likely explanation or explanations from the list of explanations provided. Answers on the list may be selected once, more than once, or not at all.Auditor's observed changes (considered independent of each other).Inventory turnover increased substantially from the prior year. (Select 3 explanations)Accounts receivable turnover decreased substantially from the prior year. (Select 3 explanations)Allowance for doubtful accounts increased from the prior year, but allowance for doubtful accounts as a percentage of accounts receivable decreased from the prior year. (Select 3 explanations)Long term debt increased from the prior year, but interest expense increased a larger than proportionate amount than long term debt. (Select 1 explanation)Operating income increased from the prior year although the entity was less profitable than in the prior year. (Select 2 explanations)Gross margin percentage was unchanged from the prior year although gross margin increased from the prior year. (Select 1 explanation)

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Definitions:

Progressive

In politics, refers to ideologies or movements advocating for reforms and social improvements through government action and policies aimed at reducing inequality and promoting social justice.

Good Government

Refers to administrations or policies characterized by transparency, accountability, efficiency, and responsiveness to citizens' needs.

Progressives

Individuals or movements that advocate for reform and improvements in society, often focusing on issues of social justice, equality, and the eradication of corruption.

Plessy V. Ferguson

The 1896 U.S. Supreme Court decision that upheld the constitutionality of racial segregation laws for public facilities under the "separate but equal" doctrine.