Accounting homework question

Which of these is not a broad principle of cash management that helps ensure that a business remains solvent? Select one: a. Collect cash owing from accounts receivable as quickly as possible O b. Pay accounts payable just before the due date rather than when the statement is first received O c. Buy all capital equipment on hire purchase 1 d. Invest any cash that is surplus to requirements to earn a return for the business How many of these ratios are used to evaluate long-term financial stability? Debt ratio Equity ratio Capitalisation ratio Current ratio Acid test ratio Select one: a. 2 b. 3 C. 4 2. 1. 5 Souvenirs Pty Ltd has a current ratio of 3:1 and current liabilities of $15 OOO. If Souvenirs Ltd has $10000 of inventory, what is the quick ratio? Select one: a. 2.25 to 1 O b. 2.00 to 1 O c. 2.33 to 1 3. d. 1.50 to 1 World Consulting has the following data available: Sales $2 000 000 Selling expenses 200 000 Profit 400 0OO Using vertical analysis express selling expenses as a percentage of the base amount. Select one: a. 50% b. 20% O C. 10% 4. O d. 12%Financial statements in which each item is stated as a percentage of some specic base item in the same statement are known as: Select one: a. Comparative statements b. Common size statements A c. General purpose statements \"T d. Base rate statements The prot margin ratio measures: Select one: F\"- a. The rate of return on total assets V'- b. The difference between the purchase price and the selling price of inventory \"' c. The proportion of each sales dollar that represents prot f"- d. Return to shareholders Which of the following is n_oj true? Select one: '3 a. A low current ratio may indicate difculty in meeting short-term commitments /_\\ b. A current ratio of $1.50 of current assets for each 51 of current liabilities should always be maintained r3 c. A high current ratio may indicate excessive investment in working capital _/\\ d. The current ratio can be manipulated at balance date. e.g. by using cash to pay off short-term debt When calculating the quick (acid test) ratio which of these is normally deducted from current assets? Select one: /'\\ a. Inventory and accounts receivable /"\\ b. Cash and prepayments c. Accounts receivable and inventory xx d. Inventory and prepaid expenses 10. The ratio is a more rigorous measure of short-term liquidity than the current ratio. turnover is a measure of how many times average accounts receivables are converted into cash during the year