Practice Multiple Choice_new

# Practice Multiple Choice_new - MC-1Practice Multiple...

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Unformatted text preview: MC-1Practice Multiple ChoiceChapter 161.The following data on sales has been provided:20x520x420x320x220x1 Sales\$4,203\$3,632\$3,827\$3,504\$3,405Using 20x1 as the base year, the sales trend isa.100%, 103%, 112%, 107%, 123%.b.97%, 100%, 109%, 104%, 120%.c.100%, 106%, 107%, 112%, 104%.d.97%, 100%, 104%, 109%, 120%.2.The following information has been provided:Sales\$25,000Total assets200,000Cost of goods sold19,000Cash2,000Accounts payable4,000Operating income500Total liabilities60,000Selling expense1,500Compute the common-size selling expense percentage.a.7.5 percentb.6 percentc..75 percentd.2.5 percentUse the following information for question 3Sales (75 percent on credit)\$140,000Cost of goods sold120,000Average inventory20,000Average receivable15,0003.The inventory turnover isa.six times.c.fifty-two times.b.seven times.d.sixty-one times.4.Assume that a firm's current ratio is 3 to 1 and the firm pays a current debt with cash. How will the current ratio be affected?a.The current ratio will increase.b.The current ratio will decrease.c.The current ratio will not change.d.The effect cannot be determined.MC-25.Which of the following ratios help users assess the company's ability to meet currently maturing or short-term obligations?Dividend payout ratioAcid-test ratioa.NoYesb.NoNoc.YesNod.YesYes6.Which of the following ratios is (are) useful in assessing a company's ability to pay long-term obligations?Times Interest EarnedReturn on Total Assetsa.NoNob.NoYesc.YesYesd.YesNo7.K.T. Company has sales of \$400,000 per year, interest expense of \$12,000 per year, taxes of \$33,600 and net income after tax of \$50,400. K.T. Company's times interest earned ratio is:a.4.2 times.b.11.5 times.c.5.2 times.d.8.0 times.8.Sand Company has a current ratio greater than 1. Which of the following actions would improve the current ratio?a.Collect some accounts receivable.b.Acquire some inventory on account.c.Sell some equipment for cash.d.Use cash to pay off some accounts payable.e.Both c and dUse the following information for the next 2 questions.Bragg Company recorded the following data for 20x2 and 20x3:20x220x3Sales \$200,000\$180,000Cost of Goods Sold100,00080,000Net Income40,00036,000Accounts Receivable, December 3116,0008,000Inventory, December 3120,00040,000MC-39.Assume 45% of total sales are cash sales. The average collection period for 20x3 was:a.44.24 days.b.54.07 days.c. 36.05 days.d.29.49 days.10. The inventory turnover ratio for 20x3 was:a.2.00 times.b. 2.67 times.c. 4.80 times.d. 4.00 times.Use the following information for the next 2 questions.Nydock Company had the following selected account balances on December 31, 20x5:Cash\$12,000Accounts Payable18,000Building and Equipment80,000Retained Earnings40,000Marketable Securities 3,000Accrued Payables12,000Accounts Receivable15,000Prepaid Expenses9,000Bonds Payable7,500Inventory6,00011. At December 31, 20x5, Nydock Company's working capital was:a. \$15,000b. \$ 7,500c. \$27,000d. \$33,00012. At December 31, 20x5, Nydock Company's current ratio was:a. 3.3 to 1....
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## This note was uploaded on 04/15/2008 for the course PSC 101 taught by Professor Thomas during the Spring '08 term at Baylor.

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Practice Multiple Choice_new - MC-1Practice Multiple...

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