136.In ratio analysis, the ratios are never expressed as a

a.rate.

b.logarithm.

c.percentage.

d.simple proportion.

137.The current ratio is

a.calculated by dividing current liabilities by current assets.

b.used to evaluate a company's liquidity and short-term debt paying ability.

c.used to evaluate a company's solvency and long-term debt paying ability.

d.calculated by subtracting current liabilities from current assets.

138.The current ratio is a

a.liquidity ratio.

b.profitability ratio.

c.long-term solvency ratio.

d.cash flow ratio.

139.A company with $60,000 in current assets and $40,000 in current liabilities pays a $1,000 current liability. As a result of this transaction, the current ratio and working capital will

a.both decrease.

b.both increase.

c.increase and remain the same, respectively.

d.remain the same and decrease, respectively.

140.The receivables turnover and inventory turnover ratios are used to analyze

a.long-term solvency.

b.profitability.

c.liquidity.

d.leverage.

141.Winsor Clothing Store had a balance in the Accounts Receivable account of $760,000 at the beginning of the year and a balance of $840,000 at the end of the year. Net credit sales during the year amounted to $6,800,000. The average collection period of the receivables in terms of days was

a.30 days.

b.365 days.

c.45.1 days.

d.42.9 days.

142.Winsor Clothing Store had a balance in the Accounts Receivable account of $760,000 at the beginning of the year and a balance of $840,000 at the end of the year. Net credit sales during the year amounted to $6,800,000. The receivables turnover ratio was

a.8.0 times.

b.8.3 times.

c.8.5 times.

d.7.9 times.

143.A high receivables turnover ratio indicates

a.customers are making payments quickly.

b.a large portion of the companys sales are on credit.

c.many customers are not paying their receivables.

d.the companys sales have increased.

144.Pine Hardware Store had net credit sales of $4,225,000 and cost of goods sold of $3,000,000 for the year. The Accounts Receivable balances at the beginning and end of the year were $600,000 and $700,000, respectively. The receivables turnover ratio was

a.5.6 times.

b.6.5 times.

c.4.6 times.

d.6 times.

145.Goll Clothing Store had a balance in the Accounts Receivable account of $820,000 at the beginning of the year and a balance of $880,000 at the end of the year. Net credit sales during the year amounted to $7,310,000. The receivables turnover ratio was

a.8.6 times.

b.8.3 times.

c.8.2 times.

d.8.9 times.