Accounting II Chapter 17

Which of the following is NOT a quick asset?

• cash

• merchandise inventory

• accounts receivable

• marketable securities

Total current assets: 1,500,000 and total current liabilities = 700,000. The current ratio is

• .47 times

• 1.2 times

• 2.1 times

• 4.7 times

Sources of guidelines for acceptable performance levels come from from all of the following EXCEPT

• prior company performances

• trade performance standards

• IRS guidelines

• financial and credit reporting companies

The best way to earn a consistent rate on net sales is to

• increase sales

• increase net income

• decrease sales

• control costs

Average book value of accounts receivable is $525,000 and the accounts receivable turn ratio is 10, net sales on account

• $52,500

• $5,250,000

• $525,000

• $52,500,000

Which of the following is most likely to be used by investors to determine the best investment

• rate of return earned on average stockholders' equity

• acid test ratio

• rate earned on net sales

• debt ratio

Which of the following is most likely to be used by investors to determine the best investment

• rate of return earned on average stockholders' equity

• acid test ratio

• rate earned on net sales

• debt ratio

If earnings per share increased from $6.22 in the prior year to $6.79 in the current year

• The number of shares outstanding increased

• Net sales increased

• Net income earned for each share increases

• current assets increases

Total assets are $200k; total stockholders equity is $1.2M of total assets; equity ratio is

• 167%

• 67%

• 40%

• 60%

The sum of the current ratio an acid-test ratio equals 100%

• True

• False