Your Client Left the Cash Receipts Journal Open After Year-End

question 9

Multiple Choice

Your client left the cash receipts journal open after year-end for an extra day and included January 1 cash receipts in the 12/31/XX totals.All of those cash receipts were due to cash sales.Assuming the client uses a periodic inventory system with a 12/31/XX count of the physical inventory,which of the following is most likely to be true relating to the year XX financial statements?

• A)Sales are understated.
• B)Accounts receivable are understated.
• C)Inventory is overstated.
• D)Net income is overstated.

Calculate specific cost measures (MC, ATC, AVC, AFC) given appropriate data.

Analyze the effects of changes in production levels on different cost measures.

Evaluate the impact of technological advances and changes in input prices on cost curves.

Determine profit-maximizing output levels using cost data.

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Definitions:

Cash Available

Refers to funds that a company or individual can immediately use or access for payments, investments, or other financial needs.

Disbursements

Payments made by a business, often involving cash outflows for operating expenses, acquisitions, or investments.

Ending Cash Balance

The amount of cash a company has at the end of a given period, reflecting all cash inflows and outflows during that period.

Cash Disbursements

Outflows of cash for various purposes, including operating expenses, asset purchases, and other business activities.