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16. A typical classified balance sheet provides no information about which of th

ID: 2473670 • Letter: 1

Question

16. A typical classified balance sheet provides no information about which of the following items?

A. For what the company owes money

B. How much the company owes

C. To whom the company owes money

D. The proportion of the company's debts that will be paid in the short-term

17. If net income is rising, but net sales revenue and the gross profit percentage remain the same, then:

A. cost of goods sold is rising.

B. operating expenses are falling.

C. operating expenses are rising.

D. cost of goods sold is falling.

18. Negative operating cash flow may indicate all of the following except:

A. the company may not be able to replace property, plant and equipment.

B. stockholders may not receive a dividend.

C. the company did not earn a profit from its core business activity.

D. the company may be in the introductory phase of its life cycle.

19. A company’s comparative balance sheet show total assets of $1,310,000 and $1,035,000, for the current and prior years, respectively. The percentage change to be reported in the horizontal analysis is an increase of:

A. 21%.

B. 13%.

C. 27%.

D. 12%.

Explanation / Answer

Answer

16. C. To whom the company owes money

17. B. operating expenses are falling.

18. C. the company did not earn a profit from its core business activity.

19. C. 27%.

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