At the End of 2015 It Is Discovered That the Accountant

question 111

Multiple Choice

At the end of 2015 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:

FMVSS 121

A U.S. Federal Motor Vehicle Safety Standard pertaining to the performance and design requirements for air brake systems in heavy trucks and buses.

Legislation

Laws and statutes enacted by a legislative body to regulate, authorize, sanction, grant, declare, or restrict.

FMVSS 121

A regulation set forth by the Federal Motor Vehicle Safety Standards concerning air brake systems in heavy vehicles, ensuring safety and performance.

Legislation

Laws and regulations enacted by a governmental body to regulate, authorize, sanction, grant, declare, or restrict.