Question : 101. An acceleration in the collection of receivables will tend to : 1234276

101. An acceleration in the collection of receivables will tend to cause the accounts receivable turnover to 
A. decrease
B. remain the same
C. either increase or decrease
D. increase

102. Based on the following data for the current year, what is the number of days’ sales in accounts receivable?
 

Net sales on account during year$584,000

Cost of goods sold during year300,000

Accounts receivable, beginning of year45,000

Accounts receivable, end of year35,000

Inventory, beginning of year90,000

Inventory, end of year110,000

 
A. 5.8
B. 11.4
C. 21.9
D. 22.5

103. Based on the following data for the current year, what is the inventory turnover?
 

Net sales on account during year$500,000

Cost of goods sold during year330,000

Accounts receivable, beginning of year45,000

Accounts receivable, end of year35,000

Inventory, beginning of year90,000

Inventory, end of year110,000

 
A. 3.3
B. 8.3
C. 3.7
D. 3.0

104. Once inventory is excessive which item below is not true? 
A. reduce solvency
B. increase taxes
C. increase ordering costs
D. increase storage costs

105. Based on the following data for the current year, what is the number of days’ sales in inventory?
 

Net sales on account during year$1,204,500

Cost of goods sold during year657,000

Accounts receivable, beginning of year75,000

Accounts receivable, end of year85,000

Inventory, beginning of year81,600

Inventory, end of year98,600

 
A. 54.8
B. 45.3
C. 24.7
D. 29.9

106. Which of the following ratios provides a solvency measure that shows the margin of safety of noteholders or bondholders and also gives an indication of the potential ability of the business to borrow additional funds on a long-term basis? 
A. ratio of fixed assets to long-term liabilities
B. ratio of net sales to assets
C. number of days’ sales in receivables
D. rate earned on stockholders’ equity

107. The number of times interest charges are earned is computed as 
A. net income plus interest charges, divided by interest charges
B. income before income tax plus interest charges, divided by interest charges
C. net income divided by interest charges
D. income before income tax divided by interest charges

108. Balance sheet and income statement data indicate the following:
 

Bonds payable, 10% (issued 1988 due 2012)$1,000,000

Preferred 5% stock, $100 par (no change during year)300,000

Common stock, $50 par (no change during year)2,000,000

Income before income tax for year350,000

Income tax for year80,000

Common dividends paid50,000

Preferred dividends paid15,000

Based on the data presented above, what is the number of times bond interest charges were earned (round to one decimal point)? 
A. 3.7
B. 4.4
C. 4.5
D. 3.5

109. The current ratio is 
A. used to evaluate a company’s liquidity and short-term debt paying ability.
B. is a solvency measure that indicated the margin of safety of a noteholder or bondholder.
C. calculated by dividing current liabilities by current assets.
D. calculated by subtracting current liabilities from current assets.

110. A company with $60,000 in current assets and $40,000 in current liabilities pays a $1,000 current liability. As a result of this transaction, the current ratio and working capital will 
A. both decrease.
B. both increase.
C. increase and remain the same, respectively.
D. remain the same and decrease, respectively