Which of the Following Trends Found on Financial Reports Would

question 4

Multiple Choice

Which of the following trends found on financial reports would most likely indicate a possible problem?

• A) A material decrease in the receivables turnover.
• B) A material increase in inventory turnover.
• C) A material increase in daily sales compared to total outstanding receivables.
• D) A material increase in the acid-test ratio.

---

Definitions:

Incubation Effect

A phenomenon in problem-solving where a solution or creative insight comes to mind after taking a break from focused work on the problem.

Computer Code

A set of instructions or a program written by humans to be executed by computers.

Field Dependence

A cognitive style characterized by a reliance on external frames of reference and the tendency to perceive objects as a whole rather than as separate parts.

Slanted Wording

Slanted wording involves the use of biased, misleading, or emotionally charged language to influence an audience's perception.