Question :
71. The operating cycle for a merchandiser that sells only for : 1256857
71. The operating cycle for a merchandiser that sells only for cash moves from:
A. Purchases of merchandise to inventory to cash sales.
B. Purchases of merchandise to inventory to accounts receivable to cash sales.
C. Inventory to purchases of merchandise to cash sales.
D. Accounts receivable to purchases of merchandise to inventory to cash sales.
E. Accounts receivable to inventory to cash sales.
72. The current period’s ending inventory is:
A. The next period’s beginning inventory.
B. The current period’s cost of goods sold.
C. The prior period’s beginning inventory.
D. The current period’s net purchases.
E. The current period’s beginning inventory.
73. Beginning inventory plus net cost of purchases is:
A. Cost of goods sold.
B. Merchandise available for sale.
C. Ending inventory.
D. Sales.
E. Shown on the balance sheet.
74. A company’s cost of goods sold was $4,000. Determine net purchases and ending inventory given goods available for sale were $11,000 and beginning inventory was $5,000.
A. Net Purchases: $15,000; ending inventory: $7,000
B. Net Purchases: $10,000; ending inventory: $15,000
C. Net Purchases: $9,000; ending inventory: $6,000
D. Net Purchases: $6,000; ending inventory: $7,000
E. Net Purchases: $16,000; ending inventory: $20,000
75. The acid-test ratio:
A. Is also called the quick ratio.
B. Measures profitability.
C. Measures inventory turnover.
D. Is generally greater than the current ratio.
E. Is not used by merchandise companies.
76. Quick assets are defined as:
A. Cash, short-term investments, and inventory.
B. Cash, short-term investments, and current receivables.
C. Cash, inventory, and current receivables.
D. Cash, noncurrent receivables, and prepaid expenses.
E. Accounts receivable, inventory, and prepaid expenses.
77. ABC Corporation had total quick assets of $5,888,000, current assets of $11,700,000, and current liabilities of $8,000,000. Its acid-test ratio equals:
A. 0.50
B. 0.68
C. 0.74
D. 1.50
E. 2.20
78. A company’s current assets were $17,980, its quick assets were $11,420, and its current liabilities were $12,190. Its quick ratio equals:
A. 0.94
B. 1.07
C. 1.48
D. 1.57
E. 2.40
79. Liquidity problems are likely to exist when a company’s acid-test ratio:
A. Is less than the current ratio,
B. Is 1 to 1,
C. Is higher than 1 to 1,
D. Is substantially lower than 1 to 1,
E. Is higher than the current ratio,
80. The acid-test ratio differs from the current ratio in that:
A. Liabilities are divided by current assets.
B. Prepaid expenses and inventory are excluded from the calculation of the acid-test ratio.
C. The acid-test ratio measures profitability and the current ratio does not.
D. The acid-test ratio excludes short-term investments from the calculation.
E. The acid-test ratio is a measure of liquidity but the current ratio is not.
