Question : 71. The following statements regarding merchandise inventory true except: A. Merchandise inventory reported : 1225839

 

71. The following statements regarding merchandise inventory are true except: 

A. Merchandise inventory is reported on the balance sheet as a current asset.

B. Merchandise inventory refers to products a company owns and intends to sell.

C. Merchandise inventory can include the cost of shipping the goods to the store and making them ready for sale.

D. Merchandise inventory does not appear on the balance sheet of a service company.

E. Merchandise inventory purchases are not considered part of the operating cycle for a business.

72. The following statements are true regarding the operating cycle of a merchandising company except: 

A. The operating cycle begins with the purchase of merchandise.

B. The operating cycle is shortened by credit sales.

C. The operating cycle ends with the collection of cash from the sale of merchandise.

D. The operating cycle can vary in length among different merchandising companies.

E. The operating cycle sometimes involves accounts receivable.

73. Merchandise inventory: 

A. Is a long-term asset.

B. Is a current asset.

C. Includes supplies.

D. Is classified with investments on the balance sheet.

E. Must be sold within one month.

74. 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.

75. 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.

76. Beginning inventory plus net purchases is: 

A. Cost of goods sold.

B. Merchandise available for sale.

C. Ending inventory.

D. Sales.

E. Shown on the balance sheet.

77. 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. Measures return on assets.

78. The 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.

79. ABC Corporation’s total quick assets were $5,888,000, its current assets were $11,700,000 and its current liabilities were $8,000,000. Its acid-test ratio equals: 

A. 0.50.

B. 0.68.

C. 0.74.

D. 1.50.

E. 2.20.

80. 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.

 

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