Effect of errors involving marketable securities and accounts receivable on financial statement ratios. Indicate using O/S (overstated), U/S (understated), or NO (noeffect)

the pre-tax effect of each of the following errors on ( 1 ) the rate of return on assets,

(2) the cash flow from operations to average current liabilities ratio, and (3) the debtequity ratio. Each of these ratios is less than 100 percent before discovering the error.

a. A firm holding marketable securities classified as available for sale neglected to write down the securities to market value at the end of the year.

b. A firm using tlie allowance method neglected to provide for estimated uncollectible accounts at the end of the year.

c. A firm using the allowance method neglected to write off specific accounts as uncollectible at the end of the year.

d. A firm credited a check received from a customer to Advances from Customers even though the customer was paying for purchases previously made on account.

e. A firm neglected to accrue interest receivable on a note at the end of the year.