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  3. 19. summerlea ltd revalued its land and buildings

19. Summerlea Ltd revalued its land and buildings at the year ended 31 October 2022...

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Accounting

image 19. Summerlea Ltd revalued its land and buildings at the year ended 31 October 2022 for the first time. When comparing the year-on-year performance and position of Summerlea Ltd which of the following ratios would be distorted? (i) Gearing ratio (ii) Return on capital employed (iii) Asset turnover (iv) Current Ratio A. (i), (ii) and (iii) B. (i) and (ii) C. (iii) and (iv) D. All of the above 20. Many commentators believe that the trend of earning per share(EPS) is a more reliable indicator of underlying performance than the trend of the net profit for the year. Which of the following statements supports this view? A. The disclosure of a diluted EPS figure is a forecast of the trend of profit for future periods B. The comparative EPS is restated where a change in accounting policy affects the previous year's profit. C. Net profit can be manipulated by the choice of accounting policies but EPS cannot be manipulated in this way D. EPS takes into account the additional resources made available to earn profit when new shares are issued for cash, whereas net profit does not

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