Which of the Following Statements Is FALSE

question 22

Multiple Choice

Which of the following statements is FALSE?

• A)The aging schedule is also sometimes augmented by analysis of the payments pattern,which provides information on the percentage of monthly sales that the firm collects in each month after the sale.
• B)Because accounts receivable days can be calculated from the firm's financial statement,outside investors commonly use this measure to evaluate a firm's credit management policy.
• C)If the aging schedule gets "top-heavy"-that is,if the percentages in the upper half of the schedule begin to increase-the firm will likely need to revisit its credit policy.
• D)Seasonal sales patterns may cause the number calculated for the accounts receivable days to change depending on when the calculation takes place.

Recognize and account for dividends from investments under different accounting methods.

Understand the principles of accounting for intercompany inventory transactions and profit elimination.

Grasp the concept of intercompany asset transfers, including equipment and land, and the associated profit eliminations.

Comprehend the treatment and impact of intercompany bond transactions in consolidated financial statements.

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Definitions:

Dividend Yield Ratio

A financial ratio that shows how much a company pays out in dividends each year relative to its share price, often used by investors to gauge the income a stock provides.

Dividends

Payments made by a corporation to its shareholder members, usually as a distribution of profits.

Common Stock

A type of equity security that represents ownership in a corporation, providing voting rights and a share in the company's profits via dividends.

Book Value Per Share

A financial measure that divides a company's net asset value less any intangible assets and liabilities by the number of outstanding shares.