Selected Data from the Financial Statements Are Provided in the Following

question 127

Multiple Choice

Selected data from the financial statements are provided in the following table:
$\begin{array}{lrr}&\text { Year } 2&\text { Year } 1\\\text { Accounts receivable } & \$ 120,000 & \$ 76,000 \\\text { Inventory } & 24,000 & 32,000 \\\text { Total assets } & 900,000 & 760,000 \\\text { Net sales } & 760,000 & 540,000 \\\text { Cost of goods sold } & 320,000 & 420,000\end{array}$
-Refer to the figure Rags to Riches.Which of the following would result from a horizontal analysis of the company's balance sheet?

• A) Accounts receivable increased $22,000 or 57.9% during Year 2.
• B) Accounts receivable is five times larger than inventory in Year 2.
• C) Accounts receivable is 13.3% of total assets in Year 2.
• D) The accounts receivable turnover ratio is 7.76 in Year 2.

Understand the contractual obligations and potential breaches within accountant-client relationships.

Recognize the regulatory environment governing accountants, including oversight bodies and legal liabilities under various securities acts.

Comprehend the professional standards and liabilities associated with negligence and professional conduct in accounting.

Identify the conditions under which accountants can be held liable to third parties and understand the scope of accountant-client privilege.

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Definitions:

Autonomy

The ability to decide freely and knowledgeably without being forced.

Personal Growth

An ongoing process of understanding and developing oneself in order to achieve one's fullest potential.

Community Feeling

A sense of belonging and mutual support within a group or society.

Intrinsic

Relating to the essential nature of something or motivated by internal rewards rather than external pressures.