The Following Is a Summary of Information Presented on the Financial

question 94

Multiple Choice

The following is a summary of information presented on the financial statements of a company on December 31,2019. $$\begin{array} { | l | r | r | } \hline{ \text { Account } } & { \mathbf { 2 0 1 9 } } & { \mathbf { 2 0 1 8 } } \\\hline \text { Current Assets } & \$ 88,000 & \$ 80,000 \\\hline \text { Accounts Receivable } & 94,000 & 67,000 \\\hline \text { Merchandise Inventory } & 62,000 & 58,000 \\\hline \text { Current Liabilities } & 56,000 & 49,000 \\\hline \text { Long-term Liabilities } & 44,000 & 53,000 \\\hline \text { Common Stock } & 76,000 & 57,000 \\\hline \text { Retained Earnings } & 68,000 & 46,000 \\\hline\end{array}$$ With respect to long-term liabilities,a horizontal analysis reveals ________.

• A) long-term liabilities decreased by $19,000
• B) long-term liabilities decreased by 33.33%
• C) long-term liabilities decreased by 16.98%
• D) long-term liabilities decreased by $7000

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Definitions:

Accumulating And Assigning

The process of gathering cost data and allocating it to specific products, services, or departments.

Raw Materials Inventory

The total cost of all the materials that are used in making a product but have not yet been converted into the finished product.

Control Account

An account used in accounting to summarize and manage detailed information while keeping the general ledger free of clutter.

Expense Account

An account used to track expenses incurred, which are then offset against revenue to determine net profit.