1. a.

The company's published financial statements, usually audited by a CPA, would be the best and most reliable source of information concerning a prospective investment opportunity.

2. d.

The fair market value of the business assets at the date of purchase is the most objective measure of the value of an existing business.

3. b.

The expected realizable value for accounts receivable would be what is expected to be collected, which is the gross receivable less the amount of the allowance for doubtful accounts.

 4. c.

The only item not related to accounts receivable is c which relates to inventory.

5. a.

Horizontal analysis is used to compare current year's figures with previous years. A percentage increase or decrease during the year is computed and then compared with that same company's historical data or other companys' data in the same industry.

6. d.

Whether a company uses the periodic or perpetual inventory system has no effect on the value of the inventory that is being purchased.

7. c.

The inventory turnover is the relationship of the cost of good sold and the average inventory, $75,000 ¸ $15,000 = 5 times.

8. b.

Days sales in inventory is computed by dividing 365 by the inventory turnover, which is cost of goods sold divided by average inventory.

9. a.

An outside appraisal by a qualified appraiser would be the most objective and reliable measure of the value of fixed assets of a company.

10. b.

Unrecorded liabilities would be of primary concern because of the exposure of unknown obligations (liabilities) not recorded on the balance sheet.

11. d.

The computation is 2000 receivables of $50,000 less the 1999 receivables of $45,000 ¸ the 1999 base year receivables of $45,000 = $5,000 ¸ $45,000 = 11.11%