For each noted change, check the appropriate boxes in the table.

Noted Changes:

1. Noncurrent debt increased from the prior year, but interest expense increased by an amount that was proportionately greater than the increase in noncurrent debt. (Choose one explanation).

2.Accounts receivable turnover increased substantially form the prior year. (Choose three explanations).

3.The allowance for doubtful accounts increased from the prior year, but, as a percentage of accounts receivable, it decreased from the prior year. (Choose three explanations).

4.Operating income increased from the prior year, although the entity was less profitable than in the prior year. (Choose two explanations).

5.The gross margin percentage was unchanged from the prior year, although gross margin increased from the prior year. (Choose one explanation).

6.Inventory turnover increased substantially from the prior year. (Choose three explanations).

1	2	3	4	5	6	Explanation
						The effective income tax rate increased, as compared with the prior year.
						The effective income tax rate decreased, as compared with the prior year.
						Items shipped on consignment during the last month of the year were recorded as sales.
						Sales increased by the same percentage as cost of goods sold, as compared with the prior year.
						The same percentage of sales occurred during the last month of the year, as compared with the prior year.
						A significant number of credit memos for returned merchandise that were issued during the last month of the year were not recorded.
						Year-end purchases of inventory were overstated by incorrectly including items received in the first month of the subsequent year.
						Year-end purchases of inventory were understated by incorrectly excluding items received before year-end.
						Sales increased by a greater percentage than costs of goods sold increased, as compared with the prior year.
						Sales increased by a lower percentage than costs of goods sold increased, as compared with the prior year.
						Interest expense decreased, as compared with the prior year.
						Short-term borrowing was refinanced on a long-term basis at the same interest rate.
						Short-term borrowing was refinanced on a long-term basis at lower interest rates.
						Short-term borrowing was refinanced on a long-term basis at higher interest rates.
						A large percentage of sales occurred during the last month of the year, as compared with the prior year.
						A smaller percentage of sales occurred during the last month of the year, as compared with the prior year.