71) The current ratio is computed by:
A) dividing current assets by current liabilities
B) dividing current assets by long-term liabilities
C) dividing current liabilities by current assets
D) dividing current assets by long-term assets
72) Which of the following would
not
be part of a retailer's business cycle?
A) retailer has a receivable
B) retailer holds inventory
C) retailer has cash
D) retailer has a liability
73) Which of the four accounts listed below would be considered the most liquid?
A) Inventory
B) Equipment
C) Land
D) Accounts Receivable
74) Interest Payable, Salaries Payable, and Accounts Payable are:
A) current assets
B) current liabilities
C) long-term assets
D) long-term liabilities
75) Long-term assets:
A) are held for sale by the business
B) generally are not subject to amortization
C) include Inventory, Equipment, and Land
D) are used in the operations of the business
76) Current assets include:
A) Cash, Receivables, and Inventory
B) Cash, Receivables, and Payables
C) Cash, Receivables, and Equipment
D) Cash, Payables, and Retained Earnings
77) A common rule of thumb states that a company with a current ratio of at least ________ would probably have little trouble paying its current liabilities.
A) 2.5
B) 2.0
C) 1.5
D) 1.0
78) An improvement in the proportion of a company's assets that are financed with debt would be shown by
A) an increase in the debt ratio
B) a decrease in the debt ratio
C) an increase in the current ratio
D) a decrease in the current ratio
79) The debt ratio is computed by:
A) dividing total liabilities by total assets
B) dividing total assets by total liabilities
C) dividing current liabilities by total assets
D) dividing total assets by current liabilities
80) Which of the following combinations of ratios is preferable?
A) a high current ratio and a low debt ratio
B) a low current ratio and a high debt ratio
C) a high current ratio and a high debt ratio
D) a low current ratio and a low debt ratio