Question: A client has suffered a billing system failure near year-end. A material amount of invoices were not prepared or posted until after year-end. REV=Sales revenue,

A client has suffered a billing system failure near year-end. A material amount of invoices were not prepared or posted until after year-end. REV=Sales revenue, AR=Accounts receivable,COS=Cost of sales and INV=Inventory.

How will the following ratios appear to behave if the unrecorded amount is material?

REV/AR COS/REV COS/INV

	a.	Lower Higher Steady
	b.	Lower Lower Lower
	c.	Lower Lower Higher
	d.	Higher Higher Steady

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