Question :
61. The accounting concept or principle that perhaps the greatest single : 1208079
61. 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. Historical cost concept.
C. Conservatism principle.
D. Time value of money concept.
62. As of December 31, 2012, Grove 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, 2012 Grove issued common stock for $10,000 cash. Which of the following statements is true?
A. Grove’s current ratio will increase.
B. Grove’s current ratio will decrease.
C. Grove’s quick ratio will decrease.
D. Grove’s working capital will decrease.
63. As of December 31, 2012, Grove 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, 2012 Grove sold inventory on account for $6,000. Which of the following statements is incorrect?
A. Grove’s current ratio will decrease.
B. Grove’s quick ratio will increase.
C. Grove’s working capital will decrease.
D. None of the other answers are correct.
64. As of December 31, 2012, Grove 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, 2012, Grove recorded cost of goods sold of $4,100. As a result of this transaction, Grove’s quick ratio will:
A. Increase.
B. Decrease.
C. Remain the same.
D. Cannot be determined.
65. As of December 31, 2012, Grove 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, 2012, Grove collected $5,200 of accounts receivable. As a result of this transaction, Grove’s working capital will:
A. Increase.
B. Remain the same.
C. Decrease.
D. Cannot be determined.
66. As of December 31, 2012, Grove 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, 2012, Grove purchased merchandise on account for $4,000. Which of the following statements is true?
A. Grove’s current ratio will increase.
B. Grove’s quick ratio will increase.
C. Grove’s current ratio will decrease.
D. Grove’s quick ratio will increase and its current ratio will decrease.
67. As of December 31, 2012, Grove 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, 2012, Grove paid $3,600 on accounts payable. Which of the following statements is incorrect?
A. Grove’s current ratio will decrease.
B. Grove’s quick ratio will increase.
C. Grove’s working capital will increase.
D. Grove’s quick ratio will increase and its current ratio will decrease.
68. As of December 31, 2012, Grove 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, 2012, Grove paid $250 for transportation in cost on merchandise it had received. Which of the following statements is incorrect?
A. Grove’s current ratio will decrease
B. Grove’s quick ratio will decrease
C. Grove’s working capital will remain the same
D. Grove’s quick ratio will increase and its current ratio will decrease.
69. Barrett 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. Increase.
B. Decrease.
C. Remain the same.
D. Cannot be determined.
70. Barrett 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. Increase.
B. Decrease.
C. Remain the same.
D. Cannot be determined.
