The Accountant at Abco, Inc

question 16

Multiple Choice

The accountant at Abco, Inc. made an adjusting entry at the end of February to accrue interest on a note receivable from a customer. The effect of this entry is to:

• A) decrease ROI for February.
• B) increase ROI for February.
• C) decrease working capital at February 28.
• D)decrease the acid-test ratio at February 28.

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Definitions:

Week

A period of seven consecutive days, commonly considered as starting on Sunday and ending on Saturday.

Dimensional-analysis

A technique in chemistry and physics used to convert one unit of measurement to another, utilizing the fact that the dimensions of the original and converted measurement must be the same.

Reams

A measurement unit for paper, typically consisting of 500 sheets, but the number can vary depending on the type of ream.

Pages

The individual sheets of paper or digital screens in a book, document, or other publication, numbered for easy reference.