| 33、Assume U.S. GAAP (generally accepted accounting principles) applies unless; otherwise noted. A company accrued wages of $2,000 and collected accounts receivable of $10,000. What are the most likely effects of these two transactions on the company's current ratio and cash flow from operations, respectively? | Current ratio | Cash flow from operations | A. | Increase | Increase | B. | Increase | Decrease | C. | Decrease | Increase | D. | Decrease | Decrease |
A. Answer A B. Answer B C. Answer C D. Answer D
Correct answer = C
"Understanding the Cash Flow Statement," Thomas R. Robinson, Hennie van Greuning, Elaine Henry, and Michael A. Broihahn
2008 Modular Level I, Vol. 3, pp. 267-270, 276-277
"Financial Analysis Techniques," Thomas R. Robinson, Hennie van Greuning, Elaine Henry, and Michael A. Broihahn
2008 Modular Level I, Vol. 3, p. 591
Study Sessions 8-34-h, 10-41-d
analyze and interpret a cash flow statement using both total currency amounts and common-size cash flow statements;
calculate and interpret activity, liquidity, solvency, profitability, and valuation ratios
Accruing wages increases current liabilities, but collecting receivables has no effect on current assets; the current ratio decreases. Collecting accounts receivable increases cash flow from operations and accruing wages increases current liabilities, which also increases cash flow from operations.
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发表于 2008-5-27 15:37
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