Financial Accounting > QUESTIONS & ANSWERS > Texas A&M University, Commerce ACCT 575TBChap010.docx TBChap010. (All)

Texas A&M University, Commerce ACCT 575TBChap010.docx TBChap010.

Document Content and Description Below

Multiple Choice Questions 1. Which of the following best describes the current ratio? A. Debt ratio B. Operating performance ratio C. Liquidity ratio D. Efficiency ratio 2. Which of the foll... owing is not likely to be used to measure a company's liquidity? A. Working capital B. Financial leverage C. Current ratio D. Acid-test (quick) ratio 3. Which of the following is likely to be used to measure a company's solvency? A. Net operating profit margin B. Current ratio C. Financial leverage D. Cash to current liabilities ratio 4. Which of the following items would not typically be included in the components of the current ratio? A. Invento ry B. Accounts payable C. Capitalized software development costs D. Deferred charges 5. Imagine FASB passes a new rule that required the capitalization of R&D. The effect for a drug company would be to: A. increase its current ratio. B. decrease debt to equity ratio. C. decrease working capital. D. improve asset turnover. 6. Which of the following increases when accounts receivable is sold? A. Current ratio B. Accounts receivable turnover C. Debt-to-equity ratio D. Days' sales in receivables 7. Which of the following is not likely to be the cause of a company's low accounts receivable turnover? A. Poor collection efforts B. Low price of product C. Customers in financial distress D. Delays in customer payments [Show More]

Last updated: 2 years ago

Preview 1 out of 75 pages

Buy Now

Instant download

We Accept: