At the End of 2010 It Is Discovered That the Accountant

question 160

Multiple Choice

At the end of 2010 it is discovered that the accountant for Gower Company failed to record $60,000 of interest payable which had accrued since the last interest payment date. The current ratio, quick ratio, and debt ratio, as well as the financial statements, had already been computed using the erroneous data. Correction of the accounting records will have which of the following effects?

• A) Net income as formerly computed will not be affected by the correction of the error.
• B) The interest coverage ratio as formerly computed will not change as a result of the correction.
• C) The debt ratio as formerly computed will decrease as a result of the correction.
• D) The quick ratio as formerly computed will decrease as a result of the correction.

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Definitions:

Economically Dependent

A state wherein individuals or groups rely on others, usually family members or the state, for financial support or resources to meet their basic needs.

Child Abuse

Any act or series of acts of commission or omission by a parent or other caregiver that results in harm, potential for harm, or threat of harm to a child.

Government Agency

An organization of a national or local government which is responsible for the oversight and administration of specific functions, such as regulations or social welfare programs.

Child Abuse

Harm or mistreatment of a child by a parent, guardian, or other individuals, which can be physical, emotional, sexual, or neglect.