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For each Multiple Choice question, prepare a 2-3 sentence description, that explains why the answer is correct (or alternatively why the others are wrong). If
For each Multiple Choice question, prepare a 2-3 sentence description, that explains why the answer is correct (or alternatively why the others are wrong).
If a company uses LIFO, which of the following would most explain a decrease in the gross profit margin or rate? (assuming Revenue remains constant) A) An increase in advertising expense B) A decrease in manufacturing costs C) An increase in competition D) Purchases of inventory at the end of the period E) All of the above would decrease Gross Profit. Which of the following is an example of a cash flow from operating activities? A) Receipt of cash from lenders B) Payment of cash from the sale of common stock C) Payment of cash dividends to the stockholders D) Receipt of cash from customers E) Receipt of cash from the sale of a factory Questions 19 and 20 Use the following information: Accounts Receivable Turnover = Sales / Average Accts Receivable Days Payable Outstanding = (365 x Average Accts Payable) / COGS If the A/R turnover rate is lower. The company is possibly: A) Increasing their Credit Leniency B) Increasing Sales C) Increasing Cash D) Lowering their prices E) None of the above If the Payables Days Outstanding ratio is increasing. The company is possibly: A) Increasing the speed at which they are paying their vendors. B) Decreasing their inventory purchases. C) Increasing payments to vendors in a timelier fashion D) Financing more of their inventory purchases with supplier credit for a longer time period. E) None of the above
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