The Following Is a Summary of Information Presented on the Financial

question 98

Multiple Choice

The following is a summary of information presented on the financial statements of a company on December 31, 2019. $$\begin{array} { | l | r | r | } \hline \text { Account } &{ \mathbf { 2 0 1 9 } } & { \mathbf { 2 0 1 8 } } \\\hline \text { Current Assets } & \$ 87,000 & \$ 73,000 \\\hline \text { Accounts Receivable } & 85,000 & 81,000 \\\hline \text { Merchandise Inventory } & 63,000 & 56,000 \\\hline \text { Current Liabilities } & 53,000 & 51,000 \\\hline \text { Long-term Liabilities } & 44,000 & 52,000 \\\hline \text { Common Stock } & 70,000 & 57,000 \\\hline \text { Retained Earnings } & 68,000 & 50,000 \\\hline\end{array}$$ With respect to long-term liabilities, a horizontal analysis reveals ________.

• A) long-term liabilities decreased by $13,000
• B) long-term liabilities decreased by 22.81%
• C) long-term liabilities decreased by 15.38%
• D) long-term liabilities decreased by $2000

Describe the role of financial decision-making in aligning cash inflows and outflows.

Comprehend the concept and importance of maintaining a minimal cash balance for business operations.

Understand the concept and definition of maturity factoring.

Identify the reasons why accounts receivable and inventory, despite being liquid assets, may be considered inadequate collateral by lenders.

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