Question Details

A high accounts receivable turnover ratio indicates 



1.	The accounts receivable turnover and inventory turnover ratios are used to analyze
a.	long-term debt-paying ability.
b.	profitability.
c.	leverage.
d.	liquidity.


	
	2.	A high accounts receivable turnover ratio indicates 
a.	customers are making payments quickly.
b.	a large portion of the company's sales are on credit.
c.	many customers are not paying their receivables.
d.	the company's sales have increased.


	

	3.	Which one of the following would not be considered a liquidity ratio?
a.	current ratio
b.	inventory turnover ratio
c.	quick ratio
d.	return on total assets ratio


	
	4.	The ratios that are used to determine a company's short-term debt paying ability are
a.	asset turnover, times interest earned, current ratio, and account receivable turnover.
b.	times interest earned, inventory turnover, current ratio, and accounts receivable turnover.
c.	times interest earned, quick ratio, current ratio, and inventory turnover.
d.	current ratio, quick ratio, accounts receivable turnover, and inventory turnover.


	

	5.	Swanson Company had $250,000 of current assets and $90,000 of current liabilities before borrowing $60,000 from the bank with a 3-month note payable. What effect did the borrowing transaction have on Swanson Company's current ratio?
a.	The ratio remained unchanged.
b.	The change in the current ratio cannot be determined.
c.	The ratio decreased.
d.	The ratio increased.




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