Question Details

The inventory turnover ratio for the year was 



1.	The following information pertains to Barkley Company.:

Merchandise purchased	$1,800,000
Cost of goods sold	$2,000,000
Inventory at the end of the year	$   400,000

The inventory turnover ratio for the year was 
a.	10.
b.	5.
c.	4.
d.	3.6.




	2.	A liquidity ratio measures the
a.	income or operating success of an enterprise over a period of time.
b.	ability of the enterprise to survive over a long period of time.
c.	short-term ability of the enterprise to pay its obligations and to meet unexpected needs for cash.
d.	number of times interest is earned.


	

	3.	Parr Hardware Store had net credit sales of $5,200,000 and cost of goods sold of $4,000,000 for the year. The Accounts Receivable balances at the beginning and end of the year were $600,000 and $700,000, respectively. The accounts receivables turnover was
a.	7.4 times.
b.	8.7 times.
c.	6.2 times.
d.	8 times.


	

	4.	The current assets of Caitlin Company are $360,000. The current liabilities are $240,000. The current ratio is
a.	1.25.
b.	1.50.
c.	0.67.
d.	cannot be determined from the information provided.


	

	5.	If a company has an acid-test ratio of 1.2, what respective effects will the borrowing of cash by short-term debt and the collection of accounts receivable have on the ratio?

     Short-term                    Collection of
          Borrowing                     Receivable
a.	Increase                       No effect
b.	Increase                       Increase
c.	Decrease                     No effect
d.	Decrease                     Decrease




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