Page 170 - CAPE Financial Services Syllabus Macmillan_Neat

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(A) collection of the sales price is reasonably assured
(B) a purchase order is received
(C) production is completed
(D) cash is collected

39. The primary objective of the matching principle is to

(A) provide full disclosure
(B) record expenses when due
(C) provide timely information to external decision-makers
(D) recognize expenses in the same period as the related revenue

40. The underlying assumption that suggests that the life of a company can be divided into
artificial time periods is

(A) periodicity
(B) monetary unit
(C) going Concern
(D) economic entity

41. Wilder Inc. Bank has current assets equal to $7.5 million. The company’s current ratio is
1.2. What is the firm’s level of current liabilities (in millions)?

(A) $2.4
(B) $2.9
(C) $3.6
(D) $6.25

42. Examining the ratios of a particular firm over a period of five years, is an example of

(A) benchmarking
(B) trend analysis
(C) Du Pont analysis
(D) industry analysis

43. Which of the following would improve the current ratio?

(A) Borrowing short term to finance additional fixed assets
(B) Selling common stock to purchase fixed assets
(C) Selling fixed assets to reduce accounts payable
(D) Increasing wages paid to employees

02269010/SPEC2016

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