Multiple choice

1.  ABC Co. has an average collection period of 60 days, total credit sales for he year $3,000,000. What is the balance in account receivable at the year end?

a.  $50,000

b. $100,000

c. $500,000

d. $80,000

2. A firm has current assets of $75,000 and total assets $375,000. A firm sales are $900,000. The firm fixed assets turnover is.

a.  3.0x

b. 12.0x

c. 2.4x

d. 5.0x

3. A firm’s long term assets =$75,000, total assets = $200,000, inventory =$25,000 and current liabilities =$50,000

a. Current ratio =0.5;quick ratio= 1.5

b. Current ratio=1.0; quick ratio= 2.0

c. Current ratio= 1.5;quick ratio= 2.0

d.  Current ratio= 2.5; quick ratio= 2.0

4. A firm has total assets of $2,000,000. It has $900,000in long term debt The stockholders equality is $900,000. What is the total debt to assets ratio?

a. 45%

b. 40%

c. 55%

d. None of the above