Question 1

Which of the following ratios measures short term solvency?

Accepted Answer

current ratio

Answer

equity ratio

Answer

return on investment

Answer

debt ratio

Question 2

The ability of the company to pay short term obligations

Accepted Answer

liquidity

Answer

credibility

Answer

profitability

Answer

solvency

Question 3

Which of the following is not a measure of profitability

Accepted Answer

quick ratio

Answer

return on investment

Answer

gross profit ratio

Answer

net profit ratio

Question 4

cost of sales is also known as

Accepted Answer

cost of goods sold

Answer

cost of goods sales

Answer

operating expenses

Answer

cost of expenses

Question 5

In computing Quick ratio and current ratio both make use of current liabilities

Accepted Answer

True

Answer

sometimes

Answer

False

Answer

Never

Question 6

A ratio can be expressed in the following except

Accepted Answer

proposition

Answer

fraction

Answer

decimals

Answer

percentage

Question 7

In the absence of credit sales you will use

Accepted Answer

total sales

Answer

cash sales

Answer

credit purchases

Answer

valid sales

Question 8

The use of average is for accounts of

Accepted Answer

balance sheet only

Answer

cash flow

Answer

income statement only

Answer

balance sheet & income statement

Question 9

Averaging means beginning balance + ending balance divide by

Accepted Answer

2

Answer

4

Answer

12

Answer

6

Question 10

Which is not classified as quick assets

Accepted Answer

inventory

Answer

cash

Answer

accounts receivables

Answer

marketable securities

Question 11

It represents your collection scheme

Accepted Answer

age of receivables

Answer

age of payables

Answer

age of inventory

Answer

age of cost of sales

Question 12

In the absence of number of working days you will use how many days

Accepted Answer

360

Answer

200

Answer

365

Answer

250

Question 13

Perishable goods/ consumable goods should have _____________ inventory turnover

Accepted Answer

high

Answer

low

Answer

constant

Answer

decreasing

Question 14

Which company will have a long age of inventory?

Accepted Answer

appliance store

Answer

bakery

Answer

grocery store

Answer

meat shop

Question 15

If the payable turnover is 360 times the age of payables is

Accepted Answer

1 day

Answer

360 times

Answer

1 time

Answer

360 days

Question 16

Which is considered a trade purchases or trade accounts payable?

Accepted Answer

purchase of merchandise

Answer

purchase of office equipment

Answer

car loan

Answer

bank loan

Question 17

Collection of accounts must come first before payment of accounts

Accepted Answer

true

Answer

false

Answer

maybe

Answer

undecided

Question 18

Ability of the company to pay long term obligations

Accepted Answer

solvency

Answer

profitability

Answer

liquidity

Answer

credibility

Question 19

Which should be higher debt ratio or equity ratio

Accepted Answer

equity ratio

Answer

debt ratio

Question 20

Which company will be considered most profitable  on the basis of net profit ratio

Accepted Answer

25%

Answer

.0025

Answer

2.5%

Answer

.40%

Question 21

For a 7 11 store what is  the best inventory turnover

Accepted Answer

180x

Answer

1x

Answer

2x

Answer

10x

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