towards running the business in a going concern basis not to mention that they have engaged in external financing for the past years. Efficiency of the business tells us that the average to sell the inventories is 56 days and they have 31 days collection period as it is related to their product on credit card holders having a 30-day credit term. Unfortunately they have to pay their suppliers within 14 days which makes the business difficult to attain unless they have such huge amount of cash.
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|2.39 |1.64 | |1.1 | |Cash flow liquidity ratio* |3.27 |2.42 | | | |Average collection period |25 days |28 days | |53 days | |Days inventory held |67 days |92 days | |81 days
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Accounting Information Systems, 12e (Romney/Steinbart) Chapter 1 Accounting Information Systems: An Overview 1) Which of the following statements below shows the contrast between data and information? A) Data is the output of an AIS. B) Information is the primary output of an AIS. C) Data is more useful in decision-making than information. D) Data and information are the same. Answer: B Page Ref: 4 Objective: Learning Objective 1 Difficulty : Easy AACSB: Analytic 2) Information
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expected to be 15% per year. Consumers purchased their saris from cloth merchants located all around the country. Cloth merchants were important local figures that were well known to the area residents who granted credit in order to support their sales. The suppliers were very competitive in order to keep the merchant’s business. The suppliers were aggressive in price, service, and credit granted. Mrs. Pundir, owner and managing director of Kota Fibers, adopted policies which required a seasonal
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for $700 cash. The cost of the merchandise sold was $400. | Exercise 7-6 (Part level Submission) Prepare a sales journal and record the transactions for September that should be journalized. (Record entries in the order presented in the problem statement.) GOMES COMPANY Sales Journal | | | | | S1 | Date | Account Debited | Invoice No. | Ref | Accounts Receivable Dr. Sales Revenue Cr. | Cost of Goods Sold Dr. Inventory Cr. | 2014 | | | | | | res_EAT_1354683923723_0_07795340332621592_002
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entries have been journalized. 15. The amounts appearing on an income statement should agree with the amounts appearing on the post-closing trial balance. 17. A business entity has only one accounting cycle over its economic existence. 18. The accounting cycle begins at the start of a new accounting period. 19. Both correcting entries and adjusting entries always affect at least one balance sheet account and one income statement account. 20. Correcting
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economic health. The Gross Domestic Product (GDP) defined is the final monetary measurement of a country’s production activities, of goods and services, bought by the end users in a given period. Purchasing groceries for consumption is part of the GDP collection process. This factor is how individual household purchases affect the nation’s economy. In times of a recession, consumers spending decreases. Consumers curtail their spending and go into the savings mode. The practice of saving versus spending
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liabilities ACTIVITY RATIOS, OPERATION CYCLE EVALUATION 1. Inventory turnover, X times, 365 days a year = COGS/ Average Inventory Average days’ inventory on hand = 365/ Inventory Turnover 2. Average Collection Period ACP = Account receivable/ average daily sales Average daily sales = Sales/ 365 3. Total assets turnover, X times = Sales/ Total assets 1-2 – low ratio for stable enterprise TAT = Sales/ total assets 4. Current Assets turnover
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liquidity ratio of the company is not in critical position but still it has decreased from the 1992-1993. The company is not in a comfortable position to pay off immediate liabilities. The operating cycle of the company is not revolving smoothly. Activity ratio is also indicating downward trend. Average collection period has increased. Inventory turnover, fixed asset turnover and total asset turnover has decreased. This indicates that company is getting its cash late. As a result income has decreased .
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Grennell Farm (Case from Accounting Text and Cases twelfth edition) Early in 2006, Denise Grey was notified by a lawyer that her recently deceased uncle had willed her the ownership of a 2,000-acre wheat farm in Iowa. The lawyer asked whether Grey wanted to keep the farm or sell it. Grey was an assistant vice president in the consumer credit department of a large New York bank. Despite the distance between New York and Iowa, grey was interested in retaining ownership of the farm if she could
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