51) The entry to record accrued interest on a note receivable at year end includes a:
A) debit to Note Receivable
B) debit to Interest Receivable
C) debit to Interest Revenue
D) debit to Cash
52) The formula for computing interest expense is equal to:
A) principal × interest rate × time
B) (interest rate × principal) / time
C) (principal × time) / interest rate
D) principal / (interest rate + time)
53) Which of the following ratios is considered to be a more stringent measure of a company's ability to pay its current liabilities than the current ratio?
A) acid-test ratio
B) equity ratio
C) debt ratio
D) days' sales in receivables
54) A company has $50,000 in cash, $85,000 in short-term investments, $120,000 in net current receivables, and $145,000 in inventory. The total current liabilities of the firm are $275,000. The acid-test ratio of the company is:
A) 0.64
B) 0.93
C) 1.45
D) 1.76
55) The number of days it takes to collect the average amount of receivables is called:
A) the quick ratio
B) the acid-test ratio
C) the current ratio
D) days' sales in receivables
56) A company with net sales of $850,000, a beginning balance of net receivables of $230,000, and an ending balance of net receivables of $190,000 has a days' sales in receivables of:
A) 99 days
B) 92 days
C) 90 days
D) 82 days
57) Content Integration Inc. has $25,000 in cash, $40,000 in short-term investments, $55,000 in net current receivables, and $12,000 in prepaid expenses. The total current liabilities of the firm are $190,000. Jupiter Precision's acid-test ratio is:
A) 0.69
B) 0.63
C) 0.42
D) 0.34
58) A company with net sales of $500,000, a beginning balance of net receivables of $80,000, and an ending balance of net receivables of $90,000 has a collection period of:
A) 197 days
B) 62 days
C) 54 days
D) 6 days
59) In 2011, Digital Asset Management Corp. (DAM) received $2,500,000 on collection from their customers. These cash receipts would be reported on Krane DAM's 2011 cash flow statement as a(n):
A) financing activity
B) operating activity
C) investing activity
D) not reported on the 2008 cash flow statement
60) On a cash flow statement, collections of accounts receivables are classified as a(n):
A) operating activity
B) financing activity
C) investing activity
D) not reported on a cash flow statement