Homework Questions Multiple choice Accounting 2

If Rick's net sales increased from $40,000 to $80,000 and its operating

expenses increased from $30,000 To $50,000, then vertical analysis based on

net sales would show which of the following for operating

Expenses for the two periods (to the nearest tent

h of a percent)?

A. 62.5% and 75.0%

B. 75.0% and 62.5%

C. 160.0% and 133.

3

3%

D. 133.3

3

% and 160.0%

The current ratio for a company with current assets of 70

,

000 current liabilities of 50

,

000 total assets

of 150

,

000 and net sales of 80

,

0

00 would be

:

a. 1.4.

b. 0.714

.

c. 3.0.

d. 0.875.

A company has $56,000 in cash; $12,000 in accounts receivable;

$25,000 in temporary

investments;

and $100,000 in merchandise inventory. The company also has $60,000 in current liabilities. The

company's

acid test

(

quick

)

ratio is

:

A. 0.933.

B. 1.550.

C. 3.217.

D. 1.133.

If beginning and ending in

ventories 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

Compute the

gross profit rate when net sales are 350

,

000 and gross profits are 178

,500.

A. 51:10

b. 54%

c. 51%

d. 54:10

Saxon corporations beginning inventory was 30

,

000. The cost of goods sold was 350,000 for the

year

,

with an ending inventory of 40,000 Inventory turnover for the year is

:

a. 20 times

b. 10 times

c. 11.67 times

d. 8.75 times

D

epartmental reports are useful for all

of the following purposes EXCEPT:

a. d

etermining performance

b. dete

rmi

ning future revenue

c. controlling

d.

planning

If Rick's net sales increased from $40,000 to $80,000 and its operating

expenses increased from $30,000 To $50,000, then vertical analysis based on

net sales would show which of the following for operating

Expenses for the two periods (to the nearest tenth of a percent)?

A. 62.5% and 75.0%

B. 75.0% and 62.5%

C. 160.0% and 133.33%

D. 133.33% and 160.0%

The current ratio for a company with current assets of 70,000 current liabilities of 50,000 total assets

of 150,000 and net sales of 80,000 would be:

a. 1.4.

b. 0.714.

c. 3.0.

d. 0.875.

A company has $56,000 in cash; $12,000 in accounts receivable; $25,000 in temporary

investments;

and $100,000 in merchandise inventory. The company also has $60,000 in current liabilities. The

company's acid test (quick) ratio is:

A. 0.933.

B. 1.550.

C. 3.217.

D. 1.133.

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

Compute the gross profit rate when net sales are 350,000 and gross profits are 178,500.

A. 51:10

b. 54%

c. 51%

d. 54:10

Saxon corporations beginning inventory was 30,000. The cost of goods sold was 350,000 for the

year, with an ending inventory of 40,000 Inventory turnover for the year is:

a. 20 times

b. 10 times

c. 11.67 times

d. 8.75 times

Departmental reports are useful for all of the following purposes EXCEPT:

a. determining performance

b. determining future revenue

c. controlling

d. planning