A condensed comparative balance sheet for an entity appears below:

In looking at liquidity ratios at both balance sheet dates, what happened to the 1) current ratio and 2) acid-test (quick) ratio?

• A.Option A
• B.Option B
• C.Option C
• D.Option D

Correct Answer: D

The current ratio is determined by dividing current assets by current liabilities. The acidtest
ratio is determined by dividing quick assets by current liabilities. At December 31. Year 1. The current ratio is 6 to 1 [(US $40,000 + $120,000 + $200,000) - $60,01101. December
31. Year 2, the current ratio is 4.3 to 1 [(US $30,000 + $100,000 + $300,000) -$100,000]. Hence, there was a decrease in the current ratio. At December 31, Year 1, the acid-test ratio is 2.667 to 1 [(US $40,000 + $120,000) - $60.000]. At December 31, Year 2, the acid-test ratio is 1.3 to 1 [(US $3:0,000 + $100,000) - $100,000]. Thus, the acidtest ratio also declined. An entity's financial statements for the current year are presented below:

Comment: *

Name: *

Email: *

Verification: *

Which of the following is the most appropriate test to assess the privacy risks associated with an organization's workstations?

• A.Physical control test.
• B.Penetration test.
• C.Vulnerability test.
• D.Social engineering test.

Comment: *

Name: *

Email: *

Verification: *

Which of the following results in a tax base of zero?

• A.Trade receivables have a carrying amount of US $1 .000 and the related revenue has been included in full in the determination of taxable profit.
• B.A loan receivable has a carrying amount of US $1.000 and repayment has no tax effects.
• C.Unearned interest revenue has a carrying amount of US $1.000 and the related interest revenue was included in full in the determination of taxable profit.
• D.Accrued expenses have a carrying amount of US $1.000 and the related expense has been included in full in the determination of taxable profit.

Comment: *

Name: *

Email: *

Verification: *

Without prejudice to your answer to any other question, assume that cost of goods sold for the current year ended December 31 is 2,000,000. Inventory turnover on total inventory for the entity would be:

• A.2.04 times
• B.3.54 times
• C.4.08 times
• D.4.82 times

Comment: *

Name: *

Email: *

Verification: *

What is the expected average collection period for the entity?

• A.10 days
• B.15 days
• C.20 days.
• D.30 days.

Comment: *

Name: *

Email: *

Verification: *