Professional Documents
Culture Documents
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Jessicas Boutique has cash of $50, accounts receivable of $60, accounts payable of
$200, and inventory of $150. What is the value of the quick ratio?
.30
.55
.77
1.30
1.82
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Which of the following represent problems encountered when comparing the financial
statements of one firm with those of another firm?
I. Either one, or both, of the firms may be conglomerates and thus have unrelated lines of
business.
II. The operations of the two firms may vary geographically.
III. The firms may use differing accounting methods for inventory purposes.
IV. The two firms may be seasonal in nature and have different fiscal year ends.
a. I and II only
b. II and III only
c. I, III, and IV only
d. I, II, and III only
e. I, II, III, and IV
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10. Bobs Toys has a fixed asset turnover rate of 1.2 and a total asset turnover rate
of .84. Gerolds Toys has a fixed asset turnover rate of 1.1 and a total asset
turnover rate of .96. Both companies have similar operations. Bobs Toys:
a. is using its fixed assets more efficiently than Gerolds Toys.
b. is using its total assets more efficiently than Gerolds Toys.
c. is generating $1 in sales for every $1.20 in net fixed assets.
d. is generating $1.20 in net income for every $1 in net fixed assets.
e. has $.84 in total assets for every $.96 Gerolds has in total assets.