ACC 400 Final Exam / 100% correct answers

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ACC 400 Final Exam / 100% correct answers 1. Zelma Company 's last financial statements provided the following ratios: Current ratio 3:2 Quick ratio 1:2 Accounts receivable turnover 9.0 times Inventory turnover 8.0 times Net income percentage 12.5% Return on equity 22.6% Return on assets 9.8% To the nearest day, what is the operating cycle for Zelma? a) 80 days b) 86 days c) 172 days d) 129 days 2. The following events have been projected: A. Cash sales and collections from customers totaling $980,000 B. Cash payments for operating expenses of $560,000…show more content…
Bad Debts Expense 8,000 Allowance for Doubtful Accounts 8,000 c. Bad Debts Expense 8,000 Accounts Receivable 8,000 d. Bad Debts Expense 10,000 Accounts Receivable 10,000 10. The receivables turnover ratio a. Is computed by dividing net credit sales for the accounting period by the cash realizable value of accounts receivable on the last day of the accounting period. b. Can be used to compute the average collection period. c. Is a method of evaluating the solvency of net accounts receivable. d. Is only important to internal users of accounting information. 11. A measure of a company’s solvency is the a. acid-test ratio. b. current ratio. c. times interest earned ratio. d. asset turnover ratio. 12. The times interest earned ratio is computed by dividing a. net income by interest expense. b. income before income taxes by interest expense. c. income before interest expense by interest expense. d. income before interest expense and income taxes by interest expense. 13. The 2007 financial statements of Shadow Co. contain the following selected data (in millions). Current Assets $

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