Accounting 3 chapter 13 True or False
A decrease in the accounts receivable turnover ratio from 7.5 tomes to 6.0 times is considered a favorable trend.
false
a business can only get capital from owners investments and retained earnings
false
an inventory turnover ratio considerably lower than the acceptable range would indicate that the company is at risk for lost sales because some items could be out of stock.
false
companies must disclose comprehensive income only as a separate statement
false
on a balance sheet, accounts receivable are listed at a gross value
false
plant assets are also known as working capital
false
quick assets include cash, inventory, and accounts receivable
false
the debt ratio is a profitability ratio
false
the largest temporary difference is often associated with accounts receivable
false
when a company discontinues a segment, the revenues of that segment are included in income for operations
false
The securities and exchange commission requires public companies to submit quarterly sand annual reports
true
a low P/E ratio could mean that the stock is undervalued and would indicate a good time to buy the shares
true
accrued items often lead to temporary differences between taxable income and net income
true
an example of a permanent difference between net income and taxable income is interest revenue on a tax-exempt bond
true
an item that appears in the upper part of an income statement is closely related to the purpose of the company and its likely to recur
true
gross margin is a profitability ratio
true
operating margin is better measure of a company's profitability than a ratio using net income
true
the current ratio can be too high, indicating more capital invested in current assets than is needed to run the business
true
the debt and equity ratios show the mix of capital provided by capital borrowed and capital provided by stockholders
true
the ratio of the money earned relative to the amount of the investment is known as the return on investment
true
the sum if the debt ratio and the equity ratio equals 100%
true
to be useful, financial statements must be prepared by using the same accounting principles in each period
true
