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11) The accounts receivable turnover ratio of a merchandiser 9.8

Question : 11) The accounts receivable turnover ratio of a merchandiser 9.8 : 1412219

 

11) The accounts receivable turnover ratio of a merchandiser is 9.8 times. Calculate the days' sales in receivables for the merchandiser. (Round your answer to the nearest day.)

A) 33 days

B) 37 days

C) 28 days

D) 40 days

 

12) Which of the following is true of the proper balance sheet treatment of the Allowance for Bad Debts with a credit balance?

A) It is reported as a current liability.

B) It is reported as an operating expense.

C) It is reported as a separate, independent line item under current assets.

D) It is shown as a contra account related to accounts receivable.

 

13) A company has net credit sales of $95,000, beginning net accounts receivable of $20,000 and ending net accounts receivable of $18,000. Calculate the days' sales in receivables.

A) 60 days

B) 48 days

C) 58 days

D) 73 days

14) Which of the following is included in the numerator of the acid-test ratio?

A) Cash including cash equivalents, inventory, short-term investments, net current receivables

B) Accounts receivable and inventory

C) Cash including cash equivalents, short-term investments, net current receivables

D) Total current assets

 

15) Which of the following is included in the denominator of the acid-test ratio?

A) Total current liabilities less accounts payable

B) Total liabilities

C) Total current liabilities

D) Total current assets

 

16) From the following details, calculate the acid-test ratio. (Round to two decimal places.)

 

Cash

$120,000

Short-term investments

150,000

Net current receivables

280,000

Inventory

290,000

Total current liabilities

790,000

 

A) 0.91

B) 0.94

C) 1.06

D) 0.70

17) What is the acid-test ratio for a merchandiser having the following balances? (Round to two decimal places.)

 

Cash

$20,000

Short-term investments

40,000

Net current receivables

50,000

Merchandise Inventory

90,000

Total current liabilities

275,000

 

A) 0.93

B) 0.40

C) 0.64

D) 1.76

 

18) Which of the following is the key significance of the acid-test ratio?

A) It measures a company's ability to pay its current liabilities if they are due immediately.

B) It measures the ability of the company to earn profits out of the sales made by it.

C) It reflects how much long-term debt a company has.

D) It indicates how much cash could be realized by selling the inventory.

 

19) Which of the following is true of days' sales in receivables?

A) It measures how many days it takes to order and receive inventory.

B) It measures how many days it takes to collect the average level of accounts receivable.

C) It measures how many days it takes to sell inventory.

D) It measures how slowly the inventory is depreciated.

20) A company has net credit sales of $1,012,500, beginning net accounts receivable of $250,000, and ending net accounts receivable of $200,000. What is the days' sales in accounts receivable? (Round to nearest whole day.)

A) 81 days

B) 99 days

C) 93 days

D) 90 days

 

21) The accounts receivable turnover ratio measures ________.

A) how well a company can pay its current liabilities with its current asset

B) how many days it takes, on average, to collect receivables

C) how many days it takes, on average, to sell the inventory

D) the number of times a company collects the average accounts receivable balance in a year

 

22) Martin Sales provides the following information:

Net credit sales: $750,000

Beginning net accounts receivable: $40,000

Ending net accounts receivable: $20,000

Calculate the accounts receivable turnover ratio. (Round to the nearest whole number.)

A) 24 times

B) 25 times

C) 27 times

D) 22 times

 

 

 

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