1- The cash budget approach to financial forecasting assumes that balance sheet accounts maintain a constant relationship to cash.

True

False

2- In financial statements, the number of units shown in cost of goods sold as compared to the number of the units actually produced

		is higher.
		is lower.
		is the same.
		can be either higher or lower.

3-

Refer to the figure above. Marni's current ratio is ____.

		0.79:1
		0.5:1
		1.84:1
		None of the options

4-

Refer to the figure above. Times interest earned for Megaframe Computer is ____.

		4.5x
		9x
		11x
		7.6x

5-

Refer to the figure above. Tew's current ratio is ____.

		1.5:1
		1:1
		2:1
		None of the options

MARNI COMPANY Balance Sheet As of December 31, 2007 ASSETS Cash $50,000 Accounts Receivable 100,000 200,000 Inventory Net Plant and Equipment 650.000 $1,000,000 Total Assets LIABILITIES AND STOCKHOLDERS' EQUITY $100,000 Accounts Payable Accrued Expenses 90,000 Long-Term debt 250,000 Common Stock 100,000 Paid-In capital Retained earnings Total Liabiliies and Stockholders' Equity 50,000 410,000 $1,000,000 MARNI COMPANY Income Statement For the Year Ended December 31, 2007 Sales (a on credit $2,000,000 Cost of Goods Sold 1.750,000 Gross Profit 250,000 Sales and Administrative Expense Fixed Lease Expenses Depreciation Operating Profit Interest Expense Profit before Taxes 30,000 10,000 60,000 150,000 25.000 125,000 Taxes (40% 50,000 Net Income $75,000