At the End of 2018 It Is Discovered That the Accountant

question 15

Multiple Choice

At the end of 2018 it is discovered that the accountant for Gower Company failed to record $60,000 of interest payable that 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:

Behaviorism

A theory of learning based on the idea that all behaviors are acquired through conditioning by interacting with the environment.

Operant Conditioning

A method of learning that employs rewards and punishments for behavior, encouraging the subject to associate certain actions with specific consequences.

Observation

The act of closely monitoring or taking notice of something or someone, often used as a method in scientific research and daily learning.

Respondent Conditioning

A form of learning in which an individual develops a reflexive response to a previously neutral stimulus by associating it with another stimulus that already elicits that response.