CMPCCT

Which of the following action/s will NOT improve Return on average total assets?

• increasing its net income after income tax

• increasing revenues

• decreasing expenses

• increasing its investment in assets

Which of the following action/s will NOT improve Return on average stockholders' equity?

• increasing revenues

• going to a country with lower tax rate

• decreasing its average stockholders' equity

• increasing expenses

Which of the following action/s will IMPROVE Earnings per share?

• decreasing its net income after tax

• decreasing the share of stock outstanding

• increasing long-term debt without change in its stocks’ par value

Which of the following action/s will REDUCE price-earnings ratio?

• decreasing the share of stock outstanding

• increasing its net income after tax

• decreasing its net income after tax

• increase accounts payable

Which of the following action/s will INCREASE accounts receivable turnover?

• collecting its receivable faster

• selling more inventory

• increasing marketing efforts

• reducing its expenses

Which of the following action/s will INCREASE merchandise inventory  turnover?

•  

  collecting its receivable faster

• selling more inventory

• increasing marketing efforts

• reducing its expenses

Which of the following action/s will DECREASE current ratio?

• Increasing accounts payable

• Increasing saleable inventory

• Reducing accounts receivable

What is another way of expressing the Accounting Equation?

• Assets = Liabilities + (Revenues - Expenses)

• Assets - Liabilities = Revenues - Expenses + Beginning Capital

• Assets = Liabilities - Revenues - Expenses + Beginning Capital

• Assets = Liabilities - (Revenues - Expenses) + Beginning Capital - Ending Capital

Wages are paid every Friday for the 5-day work week. The month ended on Monday and no adjustment was recorded.

• Liabilities and owner’s equity overstated

• Assets understated and owner’s equity overstated

• Liabilities overstated and owner’s equity understated

• Assets and owner’s equity understated

Interest earned on a notes receivable was not recorded.

 

• Assets and owner’s equity understated

• Assets overstated and owner’s equity understated

• Liabilities and owner’s equity understated

• Assets and owner’s equity overstated

Answer explanation

This entry was not prepared--> Effect per Account--> Effect per Balance Sheet

DR Interest receivable or Accrued Interest income--> int.rec’vable was understated --> ASSET was understated

CR Interest Income --> int. inc. was understated --> INCOME was UNDERstated