a large portion of the company's sales are on credit.
customers are making payments quickly.
2.
Hickory Hills Pro Shop had a balance in the Accounts Receivable
account of $800,000 at the beginning of the year and a balance of $900,000 at
the end of the year. Net credit sales during the year amounted to $7,310,000.
The average collection period of the receivables in terms of days was
44 days.
42.4 days.
365 days.
41
days
3. The debt to assets ratio measures
whether interest can be paid on debt in the current year.
the percentage of the total assets provided by creditors.
the proportion of interest paid relative to dividends paid.
the company's profitability
4. The asset turnover measures
the overall rate of return on assets.
the portion of the assets that have been financed by creditors.
how often a company replaces its assets.
how efficiently a company uses its assets to generate sales
5. A liquidity ratio measures the
short-term ability of the enterprise to pay its maturing
obligations and to meet unexpected needs for cash.
income or operating success of an enterprise over a period of
time.
number of times interest is earned.
ability of the enterprise to survive over a long period of time.
6.Junebag Corporation reported net income $36,000; net sales $400,000; and
average assets $600,000 for 2014. What is the 2014 profit margin?
60%
67%
9%
11
7. The current ratio is
used to evaluate a company's solvency and long-term debt
paying ability.
calculated by subtracting current liabilities from current
assets.
calculated by dividing current liabilities by current assets.
used to evaluate a company's liquidity and short-term debt
paying ability
8. Managerial accounting information is generally prepared for
managers.
stockholders.
regulatory agencies.
creditors.
9. Which of the following are period costs?
Direct materials and direct labor
Direct labor and manufacturing overhead
Raw materials
Selling expenses
10.
Presented below are Truck Company’s monthly manufacturing cost data related
to its personal computer products.
(a)
Taxes on factory building
$820,000
(b)
Raw materials
66,000
(c)
Depreciation on manufacturing equip.
210,000
(d)
Wages for assembly line workers
340,000
Enter
each cost item in the following table, placing an “X” under the appropriate
headings.
Product Costs
Direct Materials
Direct Labor
Manufacturing Overhead
(a)
(b)
(c)
(d)
11. The
following amounts were reported by Burke Company before adjusting its
immaterial overapplied manufacturing overhead of $8,000.
Raw Materials Inventory
$40,000
Finished Goods Inventory
60,000
Work in Process Inventory
100,000
Cost of Goods Sold
770,000
Compute
what amount Burke will report as cost of goods sold after it disposes of its
overapplied overhead.
Solution: A high accounts receivable turnover indicates