Management can take deliberate steps to produce a financial statement that presents a better current ratio at the balance sheet date than the average, or normal, current ratio during the rest of the year. Analysts refer to such actions as window dressing:

a. near the end of its accounting period a firm might delay normal purchases on account.
b. hasten the collections of a loan receivable, classified as noncurrent assets, and use the proceeds to reduce current liabilities.
c. near the end of its accounting period a firm might accelerate normal purchases on account.
d. hasten the collections of a loan receivable, classified as current assets, and use the proceeds to reduce long-term liabilities.
e. choices a and b.


E

Business

You might also like to view...

It is possible for a company to grow faster than its sustainable growth rate.

A. True B. False

Business

A law firm collected $2100 in advance for work to be performed in three months. Which of the following general journal entries will the firm make to record this transaction?

A. Debit Cash, $2100; credit Unearned Legal Fees Revenue, $2100. B. Debit Accounts Receivable, $2100; credit Unearned Legal Fees Revenue, $2100. C. Debit Accounts Receivable, $2100; credit Legal Fees Revenue, $2100. D. Debit Cash, $2100; credit Accounts Receivable, $2100. E. Debit Legal Fees Revenue, $2100; credit Accounts Receivable, $2100.

Business

When a project is chosen from a group and all other projects are excluded from further consideration, the project is referred to as _________________________________

Fill in the blank(s) with correct word

Business

In a periodic review system, if the average demand increases by 100%, the restocking level is:

A) increased by 200%. B) decreased by 100%. C) decreased by 50%. D) increased by 40%.

Business