11) With a beginning Accounts Receivable balance of $20,000, an ending balance of $26,000, and net credit sales of $408,000, compute accounts receivable turnover ratio.

A) 0.05

B) 20.4

C) 17.7

D) 68

12) Chuck Company has a beginning Accounts Receivable balance of $65,000 and an ending balance of $60,000. Net credit sales are $250,000. The company’s accounts receivable turnover ratio is:

A) 3.846.

B) 4.167.

C) 4.000.

D) None of the above.

 

13) With a beginning Accounts Receivable balance of $70,000, an ending balance of $140,000, and net credit sales of $800,000, compute accounts receivable turnover ratio (rounded to the nearest tenth):

A) 7.6.

B) 11.4.

C) 5.7.

D) 3.8.

 

14) The ratio that indicates how many days it takes to turn accounts receivable into cash is the:

A) accounts receivable turnover ratio.

B) average turnover ratio.

C) average collection period.

D) quick assets turnover ratio.

 

15) Carla’s Fashions has an average collection period of 30 days. You could infer that Carla’s Fashions:

A) bills her customers monthly.

B) bills her customers quarterly.

C) has an accounts receivable turnover of approximately 12.

D) Both A and C can be inferred.

16) If the average collection period is 35 days, this means:

A) from the date of purchase to the date of payment is 35 days.

B) from the date of sale to the date of receipt of payment is 35 days.

C) from the date of discount to the date of receipt of payment is 35 days.

D) None of these answers are correct.

 

17) The inventory turnover ratio calculates:

A) how many times the inventory turns over in one period.

B) number of times inventory is purchased in one period.

C) the dollar amount of change in inventory in one period.

D) None of these answers are correct.

 

18) If beginning and ending inventories are $20,000 and $30,000, respectively, and cost of goods sold is $400,000, what is the inventory turnover ratio?

A) 18

B) 16

C) 15.5

D) 15

 

19) If beginning and ending inventories are $100,000 and 150,000, respectively, and the cost of goods sold is $450,000, what is the inventory turnover ratio?

A) 4.50

B) 3.00

C) 3.60

D) 0.28

20) If management wishes to determine the average degree of delinquency of the charge customers, they could use the:

A) rate of return on total assets.

B) rate of return on common stockholders’ equity.

C) accounts receivable turnover.

D) quick (acid test) ratio.

 

 

 



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