Question : 51.The accounting concept or principle that perhaps the greatest single : 1257078

 

 

51.The accounting concept or principle that is perhaps the greatest single culprit in distorting the results of financial statement analysis is the:   

A. Matching principle.

 

B. Conservatism concept.

 

C. Historic cost principle.

 

D. Time value of money concept.

 

 

52.As of December 31, 2013, Gant Corporation had a current ratio of 1.29, quick ratio of 1.05, and working capital of $18,000. The company uses a perpetual inventory system and sells merchandise for more than it cost. On January 1, 2014, Gant issued common stock for $10,000 cash. Which of the following statement is true?   

A. Gant’s current ratio will decrease.

 

B. Gant’s current ratio will increase.

 

C. Gant’s quick ratio will decrease.

 

D. Gant’s working capital will decrease.

 

 

53.As of December 31, 2013, Gant Corporation had a current ratio of 1.29, quick ratio of 1.05, and working capital of $18,000. The company uses a perpetual inventory system and sells merchandise for more than it cost. On January 1, 2014, Gant sold inventory on account for $6,000. Which of the following statements is incorrect?   

A. Gant’s current ratio will increase.

 

B. Gant’s quick ratio will decrease.

 

C. Gant’s working capital will increase.

 

D. None of these answers is correct.

 

 

54.As of December 31, 2013, Gant Corporation had a current ratio of 1.29, quick ratio of 1.05, and working capital of $18,000. The company uses a perpetual inventory system and sells merchandise for more than it cost. On January 1, 2014, Gant recorded cost of goods sold of $4,100. As a result of this transaction, Gant’s quick ratio will:   

A. Decrease.

 

B. Increase.

 

C. Remain the same.

 

D. Cannot be determined.

 

 

55.As of December 31, 2013, Gant Corporation had a current ratio of 1.29, quick ratio of 1.05, and working capital of $18,000. The company uses a perpetual inventory system and sells merchandise for more than it cost. On January 1, 2014, Gant collected $5,200 of accounts receivable. As a result of this transaction, Gant’s working capital will:   

A. Increase.

 

B. Decrease.

 

C. Remain the same.

 

D. Cannot be determined.

 

 

56.As of December 31, 2013, Gant Corporation had a current ratio of 1.29, quick ratio of 1.05, and working capital of $18,000. The company uses a perpetual inventory system and sells merchandise for more than it cost. On January 1, 2014, Gant purchased merchandise on account for $4,000. Which of the following statements is true?   

A. Gant’s current ratio will decrease.

 

B. Gant’s quick ratio will increase.

 

C. Gant’s working capital will increase.

 

D. Gant’s quick ratio will increase and its current ratio will decrease.

 

 

57.As of December 31, 2013, Gant Corporation had a current ratio of 1.29, quick ratio of 1.05, and working capital of $18,000. The company uses a perpetual inventory system and sells merchandise for more than it cost. On January 1, 2014 Gant paid $3,600 on accounts payable. Which of the following statements is incorrect?   

A. Gant’s quick ratio will increase and its current ratio will decrease.

 

B. Gant’s quick ratio will increase.

 

C. Gant’s working capital will remain the same.

 

D. Gant’s current ratio will increase.

 

 

58.As of December 31, 2013, Gant Corporation had a current ratio of 1.29, quick ratio of 1.05, and working capital of $18,000. The company uses a perpetual inventory system and sells merchandise for more than it cost. On January 1, 2014, Gant paid $250 for transportation in cost on merchandise it had received. Which of the following statements is incorrect?   

A. Grove’s current ratio will remain the same

 

B. Grove’s quick ratio will increase

 

C. Grove’s working capital will remain the same

 

D. Grove’s quick ratio will increase and its current ratio will remain the same.

 

 

59.Benson Company declared and paid a cash dividend totaling $500,000 on its common stock. As a result of this transaction, the company’s debt to assets ratio will:   

A. Decrease.

 

B. Increase.

 

C. Remain the same.

 

D. Cannot be determined.

 

 

60.Benson Company received cash of $1,000,000 from issuing common stock. As a result of this transaction, the company’s debt to equity ratio will:   

A. Decrease.

 

B. Increase.

 

C. Remain the same.

 

D. Cannot be determined.