Quick Review!

MCQ
1)- Method of inventory valuation that permits High profit in times of inflation
A) LIFO method
B) FIFO method
C) Average method
D) Retailing method
2)- Method of inventory valuation that permits cash savings in times of Recession
A) LIFO method
B) FIFO method
C) Average method
D) Retailing method
3)- Indicate the number of times during the period the inventory was converted to cash or
receivables.
A) Inventory Turnover
B) Receivable Turnover
C) Plant Turnover
D) Assets Turnover
4)- Indicate indication of the quality and management efficiency in collecting the receivables.
A) Inventory Turnover
B) Receivable Turnover
C) Plant Turnover
D) Assets Turnover
5)- are accounts the company has deemed uncollectible.
A) Allowance of Bad Debt
B) Account Receivable
C) account payable
D) Charge-Offs
6)- indicator of management’s efficiency in the use of assets is the asset turnover.
A) Inventory Turnover
B) Receivable Turnover
C) Plant Turnover
D) Assets Turnover

7)- Types of assets their nature is such that they are not readily convertibles to cash to pay
obligations.
A) Fixed Cost
B) Current assets
C) Fixed assets
D) Variable cost
 8)- Working Investment to Sales Ratio:
A) WI/NOPAT
B) WI/Sales
C) WI/Trade assets
D) Sales/ WI
9)- ratio is an important tool for assessing management’s performance in using assets to
generate earnings.
A) ROA
B) ROE
C) ROS
D) ATO
10)- Asset Turnover Ratio:
A) WI/Total assets
B) Total assets/Sales
C) WI/Trade assets
D) Sales/ Total assets

11)-analysis Financial data, by uses important ratio metrics to calculate statistical relationships
A) Ratio Analysis
B) Horizontal Analysis
C) Vertical Analysis
D) Retailing

12)- Financial statement breaks down the revenue a company earns against the expenses
A) Cash Flow Statement
B) Balance Sheet
C) Equity statement
D) Income Statement

13)- measurement of the degree to which a firm or project incurs a combination of fixed and
variable costs
A) Financial Leverage
B) Assets Leverage
C) Operating Leverage
D) Total Cost
14)- Account Receivable of 500 has shrinkage for 15% uncollectible the NRV equal:
A) 75
B) 425
C) 50
D) 450
15)- Inventory of 1000 has shrinkage for 10% unable to be sold the shrinkage equal:
A) 100
B) 900
C) 1100
D) 990
 16)-Decrease in tax payable will effect on Cash flow statement by:
A) Increase cash in finance activity
B) Increase cash in Investing activity
C) Decrease cash in operating activity
D) Increase cash in operating activity

17)-Decrease in Notes payable will effect on Cash flow statement by:

A) Decrease cash in finance activity
B) Decrease cash in Investing activity
C) Decrease cash in operating activity
D) Increase cash in operating activity

18)- One of the Most important DOH of Spontaneous Finance is

A) A\R DOH
B) A\P DOH
C) ADVANCE PAYMENT DOH
D) RM DOH

19)- If we know that C/A = 60 Mio C\L 40 And shrinkage =3 Mio PLWI= 2 Mio this lead to
E) Accepted Working Capital
F) Unaccepted Working Capital
G) None of them
H) Both
20)- If we know that C/A = 60 Mio C\L 80 And shrinkage =3 Mio PLWI= 2 Mio this lead to

A. Conservative Client
B. Aggressive Client
C. Mature client
D. None of them

21)-If we know that C/A = 60 Mio C\L 80 And shrinkage =3 Mio PLWI= 2 Mio this lead to
Prefer
A. Liquidity s
B. Profitability
C. Activity
D. None of them

22)- These are ratios that measure if a business' activities are profitable
A. Liquidity Ratio
B. Profitability Ratio
C. Solvency Ratio
D. Assets Efficiency Ratio
23)- These are ratios that measure ability to meet both interest and principal payments on
long-term debt and similar obligations at the time they become due
A. Liquidity Ratio
B. Profitability Ratio
C. Solvency Ratio
D. Assets Efficiency Ratio
24)- These are ratios focus on a firm's ability to pay its short-term debt obligations
A. Liquidity Ratio
B. Profitability Ratio
C. Solvency Ratio
D. Assets Efficiency Ratio
25)- which of the following ratio not used to get the Return on Equity Ratio
A. Return on Sales
B. Current Ration
C. Asset Leverage
D. Asset Turnover

True or False
1)-the amount and valuation of inventory is essential to sound credit analysis (True)
2)- the investment in inventory frequently 20-35% of the total asset investment for manufacturer,
wholesalers, and retailers (True)
3)- a low value assigned to remaining inventory will Decrease the total costs assigned to current sales
and thereby Increase profits (False)
4)- Average Method is a type of inventory valuation (True).
6)- A high ratio of returns and allowances to sales may indicate high quality merchandise that a
customer returned (False)
7)- Factor of evaluation of the account Receivable is the company’s historical experience with the
collection of accounts receivables (True)
8)- ATO (Assets Turnover) Increased when A company with a largest production cycle (False)
9)- there is a indirect relationship between fixed assets and the value added or services extended by a
company’s operations (False)
10)-the plant turnover ratios for hotels will be quite low since fixed asset investments are high (True)

11)- Financial statement analysis is used by internal only stakeholders to evaluate business
performance and value (False)