1. In a manufacturing firm, which are the most important accounts to analyze for liquidity problems?

a. Cash account on the balance sheet

b. Cash, Accruals, Prepaid, and Accounts Receivable

c. Notes Payable, Cash, and Accounts Payable

d. Accounts Receivable, Inventory, and Accounts Payable

2. Golf Inc. and Golfanatics Corp. are close competitors. Last year, both had the same level of cost of goods sold, but Golf Inc. turned its inventory over five times during the year, whereas Golfanatics turned its inventory over every 65 days. If the objective is to keep low inventory, which of the following is true?

- Golf Inc., did a better job because its inventory turnover was lower

- Golfanatics did a better job because its inventory turnover was higher

- Golf Inc., did a better job because its day sales in inventory was lower

- Golf Inc., did a better job because its level of inventory was lower was lower