In using the percentage of sales forecasting method, the assumption is that ______________. a. there is a direct relationship between notes payable and sales b. accounts payable will not increase proportionally with sales c. there is a direct relationship between long-term debt and sales d. inventories will increase proportionately with sales

In using the percentage of sales forecasting method, the assumption is that ______________. a. there is a direct relationship between notes payable and sales b. accounts payable will not increase proportionally with sales c. there is a direct relationship between long-term debt and sales d. inventories will increase proportionately with sales

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 13MC: What information can best be elicited from a receivable ratio? A. company performance with current...

See similar textbooks

QUESTION 7

In using the percentage of sales forecasting method, the assumption is that ______________.

	a.	there is a direct relationship between notes payable and sales
	b.	accounts payable will not increase proportionally with sales
	c.	there is a direct relationship between long-term debt and sales
	d.	inventories will increase proportionately with sales

Leveraging special tenchniques in analyzing historical data to predict future trends. Forecasting covers the methods and types of forecasting and their application to case studies.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

Comment on the following statements with suitable example: i. The ratio return on assets has net income in the numerator and total assets in the denominator. Explain how each part of the ratio could cause return on assets to fall. ii. Explain how return on assets could decline, given an increase in net profit margin. iii. If quoted market prices are not available, a personal financial statement cannot be prepared. Comment.
Which one of the following is an advantage of LIFO? a. In periods of rising prices, less income taxes are paid b. In periods of rising prices, more holding gains are reported in net income c. Record keeping and financial statement preparation are easier d. Conservative income statement and balance sheet disclousures result from falling prices
Consider each of the following situations independently of each other. For each of the situations provide one example of when the underlying circumstances may be such that the observed trend is unfavorable and one example of when the underlying circumstances are favorable. a. Current ratio increases from one period to the next b. Accounts receivable turnover increases from one period to the next c. Accounts payable turnover increases from one period to the next
What are some possible negative signals when the product of the accounts receivable turnover ratio is lower (i.e., fewer times)?
4. Gap and Duration Analysis Take the following balance sheet, which of the assets and labilities are rate-sensitive? Which assets and liabilities are not? a. Assets Value Liabilities Value Checkable Deposits Savings Deposits Money Market Accounts 40 Long-Term Loans Long-Term Securities 75 26 100 Reserves 54 10 Variable Rate CDs 25 Short-Term Securities Variable-rate Loans 15 30 Long-Term CDs 25 b. What is the estimated rate of change of bank profit, in terms of next year's interest rate, conditional on this year's interest rate being 2%? c. Suppose that all the long-term securities that the bank holds mature in 4 years and their interest rate will be 5% in that year. What is the approximate market-value of these long-term securities in 4 years given this year's interest rate is 2%?
Other elements being constant, the increase in an “interest receivable” account will lead to the increase in Group of answer choices The Debt Ratio The Cash Ratio The Quick Ratio The long-term Debt Ratio
which one is correct please confirm? QUESTION 25 The percentage of sales forecasting method is used by management to forecast the amount of _____________. a. debt financing needed b. profit expected for a given percentage increase in sales c. cash needed to finance future sales growth d. capital financing needed to promote marketing efforts
Which risk ratios best answer each of the following financial questions? a. How quickly is a company able to collect its receivables? b. How quickly is a company able to sell its inventory? c. Is the company able to make interest payments as they become due?
Which of the following statements are false? Select all that apply a. Liquidity ratios are used to measure the speed with which various accounts are converted into sales. b. When ratios of different years are being compared, inflation should be taken into consideration c. Return on total assets (ROA) is sometimes called return on investment d. Generally, inventory is concerned with the most liquid asset that a firm possesses. e. A P/E ratio of 20 indicates that investors are willing to pay $20 for each $1 of earnings.
Question If the % of uncollectible accounts does not change, there cannot be a savings for this concept simply because of a decrease in sales. true or false?
Which of the following statements is true? A. The percentage decrease in value when the yield-to-maturity (YTM) increases by a given amount is smaller than the increase in value when the yield-to-maturity (YTM) decreases by the same amount. B. Ratio analysis expands GAP analysis to focus on the sensitivity of bank profits across different interest rate environments. C. The repurchase price is smaller than the selling price and accounts for the interest charged by the buyer, who is lending funds to the seller with the security as collateral. D. The issuers or the firms issuing the bonds are rated on their junior unsecured debt.
Question Select three answers for changes in credit standards that are causes of changes in profits: A) Decrease in sales volume. B) Applying an aging analysis of balances C) Increase in contribution margin D) Increase in financial expenses due to an increase in the interest rate. E) Granting of discounts to incentivize prompt payment F) Increase in the investment in accounts receivable.