GBA 398 Quiz

What is the normal balance for contra asset accounts?

Debit

Credit

Which of the following is an asset account?

Prepaid Insurance

Accounts Payable

Unearned Revenue

Manufacturing companies break-down manufacturing processes into different operational steps. The operating cycle is:

Raw material, work in process, finished goods

Cash, raw material, work in process, finished goods, sales, cash

Cash, raw material, work in process, finished goods, sales

Raw material, work in progress, finished goods, sales

The cash cycle is the:

sum of the number of days of inventory and the average collection period.

sum of the number of days of inventory and the average collection period, less the
average payment period

length of time it takes for the investment of cash into inventory to be returned from
collected accounts.

The ratio that explains how efficiently companies use their assets to generate revenue.

Receivables turnover ratio

Income ratio

Quick ratio

Asset turnover ratio

Use the following information for the next question.

The times interest earned ratio for 2003 is:

4.0 times

4.8 times

5.2 times

3.0 times

The quick ratio formula uses which of the following?

Total assets

Cash

Total current assets

Inventory

Which of these actions would likely result in a lower current ratio?

Holding more stocks to offer better customer service.

Extending the time to pay suppliers

Increasing cash by selling excess fixed assets.

Allowing major customers more time to pay bills.

Which of the following is a category or element of the balance sheet?

Expenses

Losses

Liabilities

Gains

The days required for a business to receive inventory, sell the inventory, and collect cash from the sale of the inventory.

Inventory period

Accounts receivable period

Accounting period

Operating cycle

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