Jones Company presents the following data for 2012. \[\begin{array} { lr } \text {Receivables, less allowance for losses and discounts of \$12,196}&\$266,700\\ \text {Net Sales}&2,360,108\\ \text {Cost of Goods Sold}&1,580,360\\ \end{array}\] The days' sales in receivables is

A) 53.1. B) 48.2. C) 43.1. D) 38.1. E) 40.0. A) 53.1. B) 48.2. C) 43.1. D) 38.1. E) 40.0.

Exam 6: Liquidity of Short-Term Assets; Related Debt-Paying Ability

Current assets are assets that (1) are in the form of cash, (2) will be realized in cash, or (3) conserve the use of cash within the operating cycle of a business or for one year, whichever is shorter.

(True/False)

4.9/5

(37)

Question 21

By reporting marketable equity securities under current assets, management picks up a liquidity advantage.

(True/False)

4.9/5

(40)

Question 22

Which of the following does not bear on the quality of receivables?

(Multiple Choice)

4.7/5

(41)

Question 23

Which of the following types of business would normally have the longest operating cycle?

(Multiple Choice)

4.9/5

(33)

Question 24

Which of the following accounts would not be classified as a current asset?

(Multiple Choice)

4.8/5

(30)

Question 25

Which of the following would not be classified as a current asset?

(Multiple Choice)

4.9/5

(39)

Question 26

In order to classify cash as a current asset, it must be free from any restrictions that would prevent its deposit or use to pay creditors classified as long-term.

(True/False)

4.9/5

(42)

Question 27

The days' sales in receivables ratio gives an indication of the length of time that the receivables have been outstanding at the end of the year.This indication can be misleading if sales are seasonal and/or the company uses a natural business year.

(True/False)

4.8/5

(39)

Question 28

Jones Company presents the following data for 2012. Receivables, less allowance for losses and discounts of \1 2,196 \2 66,700 Net Sales 2,360,108 Cost of Goods Sold 1,580,360 The days' sales in receivables is

(Multiple Choice)

4.8/5

(36)

Question 29

Liquidity problems with receivables and/or inventory means that the current ratio needs to be much higher than when there are no such liquidity problems.

(True/False)

4.9/5

(41)

Question 30

Which of the following is not an acceptable inventory costing method?

(Multiple Choice)

4.9/5

(37)

Question 31

Which of the following ratios would generally be used to evaluate a firm's overall liquidity position?

(Multiple Choice)

4.9/5

(35)

Question 32

When doing external analysis, many of the reasons why the days' sales in receivables is abnormally high or low cannot be determined without access to internal information.

(True/False)

4.9/5

(36)

Question 33

Which of the following ratios does not represent some form of comparison between accounts in current assets and accounts in current liabilities?

(Multiple Choice)

4.8/5

(39)

Question 34

The LIFO inventory costing method results in the acid-test ratio being overstated.

(True/False)

4.8/5

(42)

Question 35

The company with the natural business year tends to overstate its accounts receivable turnover, thus overstating its liquidity.

(True/False)

4.7/5

(39)

Question 36

Working capital of a business is the excess of current assets over current liabilities.

(True/False)

4.9/5

(34)

Question 37

If the company closes the year when the activities are at a peak, the number of days' sales in inventory would tend to be overstated and the liquidity would be overstated.

(True/False)

4.8/5

(31)

Question 38

Which of the following reasons should not be considered in order to explain why the receivables appear to be abnormally high?

(Multiple Choice)

4.8/5

(36)

Question 39

Which of the following would not be a reasonable conclusion when comparing LIFO-FIFO under an inflationary condition?

(Multiple Choice)

4.8/5

(35)

Question 40

Showing 21 - 40 of 59

Current assets are assets that (1) are in the form of cash, (2) will be realized in cash, or (3) conserve the use of cash within the operating cycle of a business or for one year, whichever is shorter.

By reporting marketable equity securities under current assets, management picks up a liquidity advantage.

Which of the following does not bear on the quality of receivables?

Which of the following types of business would normally have the longest operating cycle?

Which of the following accounts would not be classified as a current asset?

Which of the following would not be classified as a current asset?

In order to classify cash as a current asset, it must be free from any restrictions that would prevent its deposit or use to pay creditors classified as long-term.

The days' sales in receivables ratio gives an indication of the length of time that the receivables have been outstanding at the end of the year.This indication can be misleading if sales are seasonal and/or the company uses a natural business year.

Jones Company presents the following data for 2012. Receivables, less allowance for losses and discounts of \1 2,196 \2 66,700 Net Sales 2,360,108 Cost of Goods Sold 1,580,360 The days' sales in receivables is

Liquidity problems with receivables and/or inventory means that the current ratio needs to be much higher than when there are no such liquidity problems.

Which of the following is not an acceptable inventory costing method?

Which of the following ratios would generally be used to evaluate a firm's overall liquidity position?

When doing external analysis, many of the reasons why the days' sales in receivables is abnormally high or low cannot be determined without access to internal information.

Which of the following ratios does not represent some form of comparison between accounts in current assets and accounts in current liabilities?

The LIFO inventory costing method results in the acid-test ratio being overstated.

The company with the natural business year tends to overstate its accounts receivable turnover, thus overstating its liquidity.

Working capital of a business is the excess of current assets over current liabilities.

If the company closes the year when the activities are at a peak, the number of days' sales in inventory would tend to be overstated and the liquidity would be overstated.

Which of the following reasons should not be considered in order to explain why the receivables appear to be abnormally high?

Which of the following would not be a reasonable conclusion when comparing LIFO-FIFO under an inflationary condition?

Introduction to Financial Reporting

Introduction to Financial Statements and Other Financial Reporting Topics

Balance Sheet

Income Statement

Basics of Analysis

Long-Term Debt-Paying Ability

Profitability

For the Investor

Statement of Cash Flows

Expanded Analysis

Special Industries: Banks, Utilities, Oil and Gas, Transportation, Insurance, Real Estate Companies

Personal Financial Statements and Accounting for Governments and Not-For-Profit Organizations

Filters