Which business transaction will affect the quick ratio? a. Purchase a fixed asset with money borrowed long term b. Liquidate a temporary investment and put the money in a checking account c. Sell some inventory and use the cash immediately to buy a fixed asset d. Make a payment to a vendor on an account payable
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Which business transaction will affect the quick ratio?a. Purchase a fixed asset with money borrowed long termb. Liquidate a temporary investment and put the money in a checking accountc. Sell some inventory and use the cash immediately to buy a fixed assetd. Make a payment to a vendor on an account payable
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- Multiple choice: 1. If you sell on credit, your cash inflow depends very much on the A. Cash sales B. Agreements or unsecured accounts C. Collection of AR D. Age of receivables 2. Initial investment of the owner A. Fixed capital B. Working capital C. Capital structure D. Equity capitalWhich of the following transactions would result in an increase in capital employed? A. Paying a trade payable in cash B. Writing off a bad debt C. Purchasing on credit D. Repaying a loan E. Selling inventory at a profit F. Increasing the bank overdraft to purchase a non - current assetTo purchase an asset such as office equipment on account, you would credit which account? (a) Cash (c) Accounts Payable (b) Accounts Receivable (d) Capital
- Which of the following ratios would a lender find most useful in monitoring a borrower's ability to make loan payments? () PE ratio Return on assets Total asset turnover Inventory turnover () Cash coverage ratio Previous Page Next Page Page 6Which of the following should show a profit in order for a financial institution to give a the company a loan a) income statement b) rent expense c) accelerated depreciation d) accounts receivable a) income statement b) rent expense c) accelerated depreciation d) accounts receivabletell whether the assets, liabilities andequity will increase (I), decrease (D) or is notaffected (NE). The company purchases supplies on credit.
- Which of the following options indicate how quickly accounts receivables are converted into cash? Select one: a. Total assets turnover b. Days to collect accounts receivable c. Working capital d. Accounts receivable turnoverWhich of the following would result when a company lends cash to a customer in exchange for a ten month note receivable? a. a noncurrent asset and an investing cash flow are created. b. a noncurrent asset and a financing cash flow are created. c. a current asset and a financing cash flow are created. d. a current asset and an investing cash flow are created.Which of the following statements regarding selling fixed assets for cash is NOT true? a.The journal entry is similar to discarding fixed assets. b.The cash payment to the buyer is recorded. c.The cash receipt is recorded. d.If the selling price is more than the book value, a gain is recorded.
- Which of the following is true? a. A credit entry will increase a long-term loan A credit entry will increase accounts payable A credit entry will increase profit b. A debit entry will increase current assets A debit entry will decrease capital A debit entry will increase profit c. A debit entry will increase receivables A credit entry will decrease current liabilities A credit entry will increase profit d. A debit entry will decrease drawings A debit entry will increase accounts receivable A debit entry will decrease accounts payableIf cash is collected at the sale:A.the operating cycle will be longer than if sold on creditB.the account payable will be decreased as a result of the saleC.the operating cycle will be shorter than if sold on creditD.the account receivable will be increased a a result of the saleWhat is the primary purpose of the Statement of Affairs ? a. To determine how much is owed by the customers b. To determine the amount for the owners equity c. To determine how is left in the bank account d. To determine if there was a gain or loss on disposal The term Margin is determined by which of the following operations? a. Adding all the incomes b. Dividing gross profit by sales c. Subtracting expenses from sales d. Multiplying capital by a decimal The Sandy Bay is a trader in sand. On December 31, 2010 the closing inventory was completely destroyed by flood rains. The following information is available: (1) Inventory at December 1, 2010 at cost $31,400 (2) Purchases for December 2010 $55,600 (3) Sales for December 2010 $88,800 (4) Standard mark-up is 25% Based on this information, what was the value of the closing inventory? a. $15,960 b. $17,760 c. $20,400 d. $25,800…
