TRUE/FALSE. accounts recelvable are valued and reported on tne dalance sneet oin the investments section. o only if they are not past due. o at gros amounts less sales returns and allowances. o at cash realizable value.

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Answer 1

On the balance sheet, accounts receivable are listed as a current asset.AR is any amount that customers owe for credit-based purchases.

On the balance sheet, how are receivables valued?

They are recorded in a company's balance sheet at the net realizable value, which is the value the company anticipates receiving in the future.After subtracting the bad debts, the net value of accounts receivable is calculated.

What is the reality regarding accounts receivable?

The money that customers owe your business for invoiced goods or services is called accounts receivable.The invoices that customers owe for items or work performed for them on credit are included in the total value of all accounts receivable, which is shown as current assets on the balance sheet.

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Related Questions

gamma company borrowed $5,000 on october 1, year 1 at 6% annual interest.. recognizing accrued interest on december 31, year 1 will cause expenses .

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Annual interest is $75.Notes payable, accounts payable, unearned revenues, and accrued liabilities are examples of current liabilities.

Which of the aforementioned are current liabilities?Notes payable, accounts payable, unearned revenues, and accrued liabilities are examples of current liabilities.Examples of current liabilities are provided below: Suppliers who offer goods or services on credit are referred to as diverse creditors. A short-term loan offered by the bank is known as an overdraft. Rent is the balance of unpaid bills for already rendered services.Accrued income is debited on the balance sheet under current assets as an adjusting journal entry when using cash basis accounting. You'll list it under earned revenue on the income statement. As soon as the money is received, make an adjustment entry to the revenue account.  

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assume that a profit-maximizing firm is perfectly competitive in both the output and the factor markets and is at its long-run equilibrium. the firm's output is 100 units, its total revenue is $600.00, and the fixed cost of production is $50.00. based on this information, which of the following is true for the firm?

Answers

It has a marginal cost of $6.00 and an average variable cost of $5.50.

Solution:

To determine the variable costs;

This is the strategy we employ.

Variable expenses equal the difference between total revenue and fixed costs.

And the average variable cost is calculated as = variable cost/output.

The values are provided to us as;

$600 in total income

$50 is the fixed cost.

100 units produced.

Calculations:

Now, the marginal revenue is;

Change in total income/change in production = marginal revenue

600/100 = marginal revenue

$6.00 in marginal revenue

The marginal revenue equals the marginal costs.

As a result, the marginal cost is $6.00.

Variable costs will now be

600 - 50 = variable cost

The variable cost is $550.

$550/100 is the average variable cost.

= $5.50

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several years ago, sixer county was sued by a former county employee for wrongful discharge. although it was to be contested by the county, at the tim

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An ex-county worker filed a lawsuit against Sixer County for unfair termination. Although the county was supposed to contest it, the lawyers thought that the Country would be at the date of the litigation.

What is an example employee?

A salesperson at the a major store is an instance of an employee. The worker is regarded as a worker since they have to perform activities in a precise way, such wearing name badges and greeting customers in a certain way.

What is an employee called?

Some businesses have opted to use a different term to refer to its staff. They refer to them by names that are more affectionate and unique, such as team members, associates, or other terms.

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your company has just installed 50 new lcd monitors to replace some older crt monitors. how should you properly dispose of the old crt monitors?

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Since new LCD monitors have been installed the old CRT monitors wll be disposed in accordance with local government regulations and handling procedures.

A computer display that uses an electron gun to produce images is known as a CRT or cathode-ray tube monitor. These displays were the most widely used ones for personal computers in the past. They were formerly thought to be cutting-edge, but LCD monitors have now supplanted them. Prior to the development of flat panel displays, computer monitors, tvs, calculator, as well as other electronic devices used the cathode ray tube (CRT) as its display technology. Unfortunately, monitors having lesser qualities might not be worth anything while being resold or renovated.

CRT monitors are no longer frequently used because they are getting older, especially with the growing acceptance of flat panel screens that use LCD and LED technologies.

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how many customer segments describe consumer behavior the best? 2. what are the profiles of the customers who belong to the various segments

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the profiles of the customers are belong to the various segments.One of the helpful methods of market segmentation is psychographic segmentation, which divides a target market into subgroups.

Based on characteristics like the values, status, attitudes, interests, beliefs, motives, or hobbies of the target market. In this way, the target market is divided into segments, each of which shares one or more of the aforementioned characteristics. Porsche AG clearly used psychographic features to characterise its clients based on the term "Top Guns" it gave to a group of people it called its customers.A type of segmentation called psychographic segmentation divides clients into groups according to their psychological traits. These traits consist of beliefs and motivations.Customers are classified into groups according to their sex, religion, age, or occupation in a process known as demographic segmentation.

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when delivering a brief special occasion speech such as a toast or speech of introduction, no lengthy quotations or statistical proof are required.

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This assertion is accurate. There is no need for in-depth quotations or statistical support while giving a quick special occasion speech, such a toast or an introduction.

What should a speaker say first in their speech's introduction?

The opening of the speech urges the audience to stay for the entire speech. An introduction's key components for success are grabbing the audience's attention, stating the problem, making it relatable, establishing credibility, and summarizing the key points.

Your toasts should include your presentations.

For instance, acceptance speeches and toasts ought to be brief (typically under two minutes). An introduction speech should be incredibly succinct—just long enough to give the audience the information they need to know about the person being introduced in a way that will help them understand and appreciate their remarks.

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Name the operating philosophy discussed in chapter 8 that is used to help manage operations in the supply chain.

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Answer:LEAN

Explanation:

LEAN is an operating philosophy of waste reduction and value enhancement.  It was originally created as the Toyota Production System (TPS) by key Toyota executives.

What is the irony in Huckleberry Finn?.

Answers

Mark Twain frequently uses irony in "The Adventures of Huckleberry Finn" to illuminate his themes, characters and plot.

The Grangerford subplot is a good example of irony being used in Huckleberry Finn. The Grangerfords and Shepherdsons have been at odds for many years and often murder one another. Every Sunday, though, they put their differences aside just long enough to attend church together before picking them back up again soon after.

The irony in this situation is that the preaching at church emphasizes brotherly love, embracing your neighbor and coexisting peacefully. The sermon is well received by the families, who discuss what is right and proper to do. They are all armed, though, and conflicts with the Shepherdsons are resolved violently in a quarrel that symbolizes the antithesis of brotherly love.

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Advertising is a paid form of communication, delivered through media from an identifiable source, about a ______ (select all that apply)
- service
- product
- medium
- idea

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Advertising is a paid form of communication, delivered through media from an identifiable source, about a service, product and Idea.

What is advertising as a form of communication?

A product or service's customers can be reached through advertising. According to the Advertising Association of the UK, advertisements are messages that are paid for by those who send them and are meant to inform or persuade individuals who receive them.

The advertising industry is made up of businesses that advertise, agencies that produce the ads, media that run the ads, and a large number of individuals who take the ads all the way to the consumer or recipient, including copy editors, visualizers, brand managers, researchers, creative minds, and designers.

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Required information drape/ DLE Knowledge Check 01 Fireplace Service company provides fireplace cleaning services and has variable costs of $100 per fireplace cleaning and revenue of $250. Their contribution margin is $ Contribution mar Required information Analysis of contribution margin ratio by sales territory can impact Ice Age's business decisions such as: Knowledge Check 01 If sales are $1,000,000 and contribution margin is $250,000, the contribution margin ratio is Contribution margin ratio 5%

Answers

According to the cleaning and revenue costs, the contribution margin is $150.

What is contribution margin?

With variable expenses of $100 for each fireplace cleaning and revenue of $250, the Fireplace Service Company offers fireplace cleaning services.

The amount of income that remains after variable costs are subtracted is referred to as the contribution margin.

Revenue less variable costs equals contribution margin. The formula for calculating the contribution margin ratio is (Revenue - Variable Costs) / Revenue.venue minus variable costs equals contribution margin.

Therefore, the contribution margin in this case is:

= 250 - 100

= $150

The contribution margin is therefore $150.

According to the cleaning and revenue costs, the contribution margin is $150.

The complete question is

Required information drape/ DLE Knowledge Check 01  Fireplace Service company provides fireplace cleaning services and has variable costs of $100 per fireplace cleaning and revenue of $250. Their contribution margin is $_____.

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if an economy experiences a decrease in aggregate demand due to a decline in consumer confidence and output falls below potential gdp, which of the following is likely to occur?

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if an economy experiences a decrease in aggregate demand due to a decline in consumer confidence and output falls below potential GDP,  is likely to occur a rise in unemployment.

Gross domestic product is the financial degree of the market cost of all the final items and services produced and bought in a specific time period through international locations. due to its complicated and subjective nature, this measure is frequently revised before being considered a dependable indicator. one of the most commonplace is GDP, which stands for gross domestic product. it is frequently stated in newspapers, on television information, and in reports with the aid of governments, central banks, and the business network. It has to turn out to be widely used as a reference point for the fitness of country-wide and global economies.

financial output is now and again referred to as gross output or definitely output. As stated earlier, the financial output isn't the same as GDP. Gross domestic product is a degree of “price delivered” on the countrywide stage.

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A depository institution takes deposits from​ ______ and earns most of its income by​ _______.

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A depository institution takes deposits from​ households and​ firms and earns most of its income by​ making loans and buying securities that earn a higher interest rate than that paid to depositors.

What is depository institution?

A depository can be described as the facility or institution, which cold be building, office, as well as  warehouse,  and they are the places where values are been deposited for storage or safeguarding.

It should be noted that the Depositories  can be the organizations, banks, as well as other financial institutions  that have the capability to hold the securities  as well as  assist in the trading of securities.

In conclusion, depository institution  are the institutions that can collect  deposits from​ households and​ firms  so they can get some funds through the making loans  as well as  buying securities  however thi s are not done for free.

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conversion of the implementation phase of the systems development life cycle (sdlc), an analyst introduces an information system in only a limited area of an organization, such as a division or department.

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Implementation includes user notification, user training, installation of hardware, installation of software onto production computers, and integration of the system into daily work processes.

This phase continues until the system is operating in production in accordance with the defined user requirements.

production is the method of mixing numerous cloth inputs and immaterial inputs (plans, information) for you to make something for intake (output). it's miles the act of creating an output, a very good or carrier which has fee and contributes to the application of individuals.[1] The vicinity of economics that focuses on manufacturing is known as the production concept, which is intertwined with the intake (or client) principle of economics.

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Which of the following methodologies takes the end product requirements from the MPS and breaks them down into their component parts and subassemblies to create a materials plan?
Materials requirement planning

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Materials requirement planning  methodologies takes the end product requirements from the MPS and breaks them down into their component parts and subassemblies to create a materials plan.

A master production schedule (MPS) is a plan for how specific commodities, such production, staffing, inventory, etc., will be generated during each time period. Typically, it has to do with production, where the plan specifies when and how much of each product will be needed. Items with "dependant" demand should be planned. Items with "direct" demand are planned. (or a separate requirement) Due to the requirement to make an item, demand is transmitted down.

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if a bank obtains a relatively large portion of its funds from conventional demand deposits, interest expenses should be relatively , while its noninterest expenses should be relatively .

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If a bank obtains a relatively large portion of its funds from conventional demand deposits, interest expenses should be relatively low, while its noninterest expenses should be relatively high.

What do mean by demand?

Demand means a consumer desire to buy goods and services without any hesitation and pay the price for it. In simple words, demand is the number of goods for which the customers are ready and willing to buy at several prices during a given time period.

What are the 5 types of demand?

The different types of demand are as follows:

Individual and Market Demand.Organization and Industry Demand.Autonomous and Derived Demand.Demand for Perishable and Durable Goods.Short-term and Long-term Demand.

What are the 5 factors of demand?

The 5 key determinants of demand for products and services are as follows:

Income.Price.Expectations, tastes, and preferences.Customer base.Economic conditions.

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What type of income is investment income?.

Answers

The investment income is that we get from the investment.

The investment income is the money we

receive in interest payment, capital gains, dividends or any profit we get from the investment is called as the investment income. The profit we earned from the any type of the investments is called as the investment income. Investment income is the money we get by the selling of something for more the price we paid for it initially.

Investment income is the profit earned from investments such as real estate and stock sales. Dividends from bonds also are investment income. Investment income is taxed at a different rate than earned income. The profits from the sale of gold coins or fine wine could be considered investment income.

If you have a savings account, the interest you earn on it is considered investment income.

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which of the following is an application of the hearsay rule used for digital evidence-related testimony?group of answer choicesall of thesepresenting best evidencebusiness recordsusing notes on the witness stand

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(A) All of these are examples of the hearsay rule being applied to testimony involving digital evidence.

What is the hearsay rule?

In a legal setting, hearsay evidence is testimony from a witness who is testifying under oath while reciting an out-of-court statement, the content of which is being presented to support the veracity of the claim made.

The "hearsay evidence rule" states that hearsay evidence is generally not accepted unless an exemption to the rule is present.

For instance, a witness can state, "Susan told me that Tom was in town," to show that Tom was present.

If Susan is not accessible for cross-examination, the witness's testimony is hearsay since it is based on an out-of-court declaration she made.

The fact that the witness who gave the statement is not present in court and cannot be questioned in person is one defense for the objection.

Therefore, (A) all of these are examples of the hearsay rule being applied to testimony involving digital evidence.

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Correct question:
Which of the following is an application of the hearsay rule used for digital evidence-related testimony? group of answer choices

a. all of these

b. presenting the best evidence

c. business records using

d. notes on the witness stand

Cumberland Co sells $2,000 or inventory to Hancock Co. for cash. Cumberland paid $1,250 for the merchandise. Under a perpetual inventory system, which of the following journal entry(les) would be recorded? Oa debit Accounts Receivable, 52,000 crodie Salen, 52,000 and debit Cont of Good Sol, $1,250, credit lavemory. $1.250 Ob debit C, 51,250, credit Salen, 51,250 Oc dehit Cash, 52.001), credit Inventory, 51,250 Od. de Cult, $2,000, credit Sales, $2,000, and debit Com of Goods Sold, $1.291, credit twentory, 51,280

Answers

Under a perpetual inventory system, which of the following journal entry would be recorded as d) debit Cash,$2,000;credit Sales,$2,000; and debit Cost of Goods Sold,$1,250;credit Inventory,$1,250.

What is the journal entry about?

When goods are sold under the perpetual inventory system, two journal entries are recorded. The first journal entry records the sale, and the second entry records the cost of sale. To record the sale, the Cash/Accounts receivable account is debited and the Sales account is credited by the sale amount. Cost of Goods Sold is used to record the cost of sale. By cost, the sold account is debited and the inventory account is credited.

In this case, the journal entry will be:

1. Debit Cash $2,000

Credit Sales  $2,000

(To record sale)  

2. Debit Cost of Goods Sold $1,250

Credit Inventory  $1,250

Therefore, the correct option is D.

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if $1,000,000 of 8% bonds are issued at 101, the amount of cash received from the sale is a.$990,000. b.$1,000,000. c.$1,010,000. d.$1,080,000.

Answers

The amount of cash received from the sale is $1,080,000.

Amount of cash earned from bond sales Equals bond face value X $1,000,000 x (102.75/100) = 1,080,000 bond quote

Bonds are issued by governments and enterprises to raise funds. By purchasing a bond, you are making a loan to the issuer, who agrees to repay the face value of the loan on a particular date and to pay you periodic interest payments along the way, generally twice a year.

Bonds are they a good investment?

Bond rates have risen significantly, giving investors the possibility to earn a substantial income. We predict inflation to reach approximately 3.5% by the end of 2023, and 10-year US Treasuries are earning more than that. This means that its inflation-adjusted, or "real," yield might rise.

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If peet’s coffee were conducting marketing research to establish whether its advertising message will be clearly understood by its customers. This question addresses which component of the communication process?.

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If peet’s coffee were conducting marketing research to establish whether its advertising message will be clearly understood by its customers. This question addresses Feedback Loop component of the communication process

What is  Feedback Loop component of the communication process?

Generally, One way to think of a system is as having a feedback loop if each time through the system, the output of one iteration serves as the input for the following cycle.

This straightforward concept can be observed in a wide variety of contexts, including homeostasis in the human body, investment banking, thermostats, biological ecosystems, and a great many other places.

A process known as a feedback loop is one in which the outputs of a system are brought full circle and used as inputs in another system.

This is a term used in the business world to describe the process of utilizing the comments or suggestions made by customers or employees (the outputs of a service or product) in order to improve the quality of the service or workplace.

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if you had a cola clause in your wage contract based on the cpi calculated above, would your standard of lviing likely increase, decrease, or stay the same during the years 2002 through 2004

Answers

The shares exchange may be CPI  calculated by means of dividing the alternate into index points by means of the sooner time period rate index expanded with the aid of 100. be aware that the alternate in index factors and the percentage alternate are unique measures of exchange and are normally one-of-a-kind.

Whilst the 12-month trade in Canada's consumer rate Index (CPI) remains the same as the remaining month, the CPI rose by means of zero.7% on a monthly basis. October 2022's inflation price of 6.nine% is nicely above the financial institution of Canada's goal variety of one% to three%, and it also outpaced the average hourly salary growth of five.6% over the last year.

To find the CPI in any yr, divide the fee of the market basket in 12 months t by way of the value of the identical marketplace basket within the base yr. The CPI in 1984 = $seventy five/$seventy five x a hundred = a hundred The CPI is just an index cost and it is listed to a hundred within the base 12 months, in this case, 1984. So charges have risen with the aid of 28% over that 20 yr duration.

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Romero has been approved for a $350,000 adjustable rate mortgage with interest set at 6.5% and monthly payments set up over the 30-year term of the loan. a. What is Romero's monthly payment? b. Using the payment calculated from Part A, what will be the balance at the end of the sixth year? C. What is the percentage paid off after six years? d. Romero originally wanted a shorter loan term, but the payments would be $2,609.51, and that was too high for Romero. What was the loan term based on that payment?

Answers

Romero’s monthly payment is $2,212.24; balance at the end of the 6th year will be $322,228.79; percentage paid off after six years is 8%; and loan term based on that payment is 20 years.

It is given that mortgage amount is $350000, no. of monthly payments is 30 years *12 which is 360. Interest rate is 6.5%. But it is given that it is paid monthly; thus, interest rate is 6.5%/12 which is 0.54%.

For calculating monthly payment, we'll use PMT Function in excel.

Thus, monthly payment = PMT(interest rate, no. of monthly payments, amount)

= PMT(0.54%,360,350000) = 2212.24

For calculating balance at the end of 6th year, the no of payments will be (30-6)*12 = 288

Thus, balance at end of 6th year = PV(0.54%,288,2212.24)

= $322228.79

For calculating percentage paid off after six years = (350000-322228.79) / 350000

= 7.93% = 8%

It is given that shorter loan term amount = $2609.51

For calculating loan terms, we'll use NPER in excel

= NPER(0.54%,-2609.51,350000,0)/12

= 20years

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recycling of paper products uses less energy than producing new paper products. group of answer choices 64% 88% 74% 35% 7%

Answers

Recycling of paper products uses 74% less energy than producing new paper products.

What is the efficiency of recycled paper?

The cost is low and the environmental benefits are high. For example, recycling 1 ton of paper saves 7,000 gallons of water, 17 trees and 463 gallons of oil. Making products from recycled materials is much cheaper, especially when it comes to cardboard and paper.

What are the advantages of recycled paper?

Recycled paper helps reduce greenhouse gas emissions that contribute to climate change. Paper recycling uses 70% less energy and water than making new paper from trees. Manufactured with recycled paper to reduce smog (and health hazards) pollution.

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a(n) blank test involves offering more product information, product samples, or premiums to the readers in advertisements, and measuring which ads generate the most interest during posttesting. multiple choice question. unaided recall attitude inquiry sales

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An inquiry test involves offering more product information, product samples, or premiums to the readers in advertisements, and measuring which ads generate the most interest during posttesting.

Assesment of advertising

The effectiveness of this advertisement needs to be improved, and it is also necessary to look for a better way of evaluating the effectiveness of advertising.

The assessment needs to be done to find out not only which ad is better than the other, but also why the ad is better. Several methods that can be used to measure the effectiveness of advertising are: (1) inquiry test, (2) recognition test, and (3) sales result test.

1.      Inquiry

Inquiry test, namely a test carried out by asking for responses or information directly to listeners or readers about the advertised goods.

2. Recognition test

Recognition test is a test carried out by giving advertising images to a group of individuals, without mentioning the brand or company name. Only then were they asked to provide their brand name.

3.      Sales result test

Sales result test (test seen from sales results) is a test conducted by comparing sales from two cities that are physically the same, where one uses advertisements, while the other city does not use them.

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heddon industries produces two products. the products' identified costs are as follows: product a product b direct materials $ 21,000 $ 16,000 direct labor 15,000 25,000 the company's overhead costs of $55,000 are allocated based on labor cost. assume 5,000 units of product a and 6,000 units of product b are produced. what amount of production costs would be assigned to product a

Answers

An amount of $56625 of manufacturing costs will be assigned to the product.

To calculate the overhead rate, divide the indirect costs by the direct costs and multiply by 100.

Cost of production is the total cost incurred by a business to either produce a product or offer its services. Production costs typically include supplies and raw materials that are consumed during production, along with labor expenses.

OH rate as % of DLC:      

Overheads                 55000  

Divide: DLC                 40000  

OH rate as % of DLC:   137.50%    

The total production cost of Product A:  

Direct material                             21000

Direct Labour                                     15000

OH (15000 × 137.50%)                           20625

The total Production cost of Product A: 56625

       

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1. Which of the following are examples of price discrimination? Explain your answers.
a. A cell phone carrier offers unlimited calling on the weekends for all of its customers.
b. Tickets to the student section for all basketball games are $5
c. A restaurant offers a 20% discount for customers who order dinner between 4 and 6 p.m.
d. A music store has a half-price sale on last year's guitars.
e. A well-respected golf instructor charges each customer a fee just under the customer's maximum willingness to pay for lessons.

Answers

A well-respected golf instructor charges each customer a fee just under the customer's maximum willingness to pay for lessons. Option E.

Price discrimination is the business practice of selling the same product to different customers at different prices. Charging adults and children different prices for the same movie is an example of price discrimination. Charging everyone the same price for goods and services is not price discrimination.

Price discrimination is a strategy used by businesses to maximize revenue by charging customers different prices based on their willingness to pay. For example, movie theaters often offer different prices for adults, seniors, and children. We also offer deals on certain days of the week. Price discrimination is a microeconomic pricing strategy in which identical or nearly similar goods or services are sold at different prices by the same supplier in different markets.

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if all prices are stuck at a predetermined level, then when a short-run aggregate supply curve is drawn with real gdp (y) along the horizontal axis and the price level (p) along the vertical axis, this curve:

Answers

If all prices are stuck at a predetermined level, then when a short-run aggregate supply curve is drawn with real GDP (Y) along the horizontal axis and the price level (P) along the vertical axis, this curve: is horizontal.

Gross domestic product is the financial degree of the market cost of all the final items and services produced and bought in a specific time period through international locations. due to its complicated and subjective nature, this measure is frequently revised before being considered a dependable indicator. one of the most commonplace is GDP, which stands for gross domestic product. it is frequently stated in newspapers, on television information, and in reports with the aid of governments, central banks, and the business network. It has to turn out to be widely used as a reference point for the fitness of country-wide and global economies.

financial output is now and again referred to as gross output or definitely output. As stated earlier, the financial output isn't the same as GDP. Gross domestic product is a degree of “price delivered” on the countrywide stage.

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assume you are in the 24 percent tax bracket and purchase a municipal bond with a yield of 2.9%. use the formula presented in this chapter to calculate the taxable equivalent yield for this investment?

Answers

Taxable equivalent yield =Tax-exempt yield / (1 − Your tax rate) =0.029 / (1 - 0.24) =0.038, or 3.8%

What is Taxable equivalent yield?

In general, tax consequences are a challenging, significant, and frequently ignored component of any financial strategy. Investors might benefit from the tax-equivalent yield computation, especially those in higher tax brackets. The yield on a taxable bond that an investor would need to earn in order to match the return on a comparable tax-free municipal bond is known as the tax-equivalent yield.

Since municipal bonds typically have low expected returns, the true impact of investing in them to save on taxes is frequently difficult to fully quantify. The calculation aids the investor in choosing between taxable and tax-free investments, like tax-free municipal bonds.

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FILL IN THE BLANK. a tax on the buyers of coffee will [ select ] the price of coffee paid by buyers, [ select ] the net price of coffee received by sellers, and

Answers

A tax on the buyers of coffee will increase the price of coffee paid by buyers, decrease the net price of coffee received by sellers, and decrease the equilibrium quantity of coffee

If a buyer pays for a good outright and then additionally pays a tax, they are subject to the tax obligation. If the tax is levied against the seller, it is also included in the price that is charged to the buyer.

The demand curve would move downward by the tax's amount if it were levied on the product's purchaser. Buyers pay more for goods when a tax is imposed on the seller, while sellers receive less money in return.

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if inventories or receivables decrease materially as a percentage of sales, analysts should strongly suspect that the earnings are overstated, even though management will invariably offer a more benign explanation

Answers

Analysts should strongly suspect that earnings are overstated when receivables or inventories decrease materially as a percentage of sales, even though management will invariably offer a more benign explanation. This statement is false.

What Should an Analyst Suspect Regarding this Question?

The reason that the statement in the question is false is that analysts should suspect the earnings are overstated when inventories and receivables increased materially, not decrease.

The main reason the statement in the problem is wrong is that it should be a concern of an analyst when there is an increase in receivables or inventories materially as a percentage of sales, not when there is a decrease. One of the things that can also trigger an increase in receivables or inventories materially as a percentage of sales is seasonal variations. When this happened, an analyst should suspect that the earnings are overstated.

This question is incomplete because it should contain a true or false option regarding the statement in the question.

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