Company A has a receivables turnover ratio of six times, while Company B, which operates in the same market sector, has a receivables turnover ratio of five times.
This suggests that

• A.Company A has a higher level of receivables than Company B and is, therefore, more efficient than Company B.
• B.Company A has a lower level of receivables than Company B and is, therefore, more efficient than Company B.
• C.Company A has a higher level of receivables than Company B and is, therefore, less efficient than Company B.
• D.Company A has a lower level of receivables than Company B and is, therefore, less efficient than Company B.

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Refer to the Exhibit.

John Taylor commenced business on 1 March 2006, paying $1,000 cash into a business bank account. During the next month the following transactions took place.
The balance on the bank account at the end of the month is:

• A.$700 debit
• B.$700 credit
• C.$1,200 debit
• D.$1,200 credit

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A company's financial statements show a gross profit of $15 million. A major error in the inventory value system has been discovered resulting in an overstatement on opening inventory of $1.2 million and an understatement in closing inventory of $1.5 million.
What is the correct gross profit figure for the period?

• A.$12.3 million
• B.$17.7 million
• C.$14.7 million
• D.$15.3 million

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A liability may best be defined as:

• A.A resource which may be used to derive income in the future
• B.The amount of money withdrawn from the business by the owners
• C.A person or entity owing money to the business
• D.An obligation to transfer economic benefits as a result of past transactions or events

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Jasper has an opening capital balance at 1 January of $84,650 credit. During the period there was an increase in assets of $16,890 and an increase in liabilities of $22,480.
The balance on the capital account at the end of the period is:

• A.$79,060 credit
• B.$5,590 debit
• C.$90,240 credit
• D.$5,590 credit

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