67. In

performing a vertical analysis, the base for sales revenues on the income

statement is

a. net sales.

b. sales.

c. net income.

d. cost of goods available for sale.

68. In performing a vertical analysis, the base

for sales returns and allowances is

a. sales.

b. sales discounts.

c. net sales.

d. total revenues.

69. In performing a vertical analysis, the base

for cost of goods sold is

a. total selling expenses.

b. net sales.

c. total revenues.

d. total expenses.

70. Each of the

following is a liquidity ratio **except** the

a. acid-test

ratio.

b. current

ratio.

c. debt

to assets ratio.

d. inventory turnover.

71. A ratio calculated in the analysis of

financial statements

a. expresses a mathematical relationship between

two numbers.

b. shows the percentage increase from one year

to another.

c. restates all items on a financial statement

in terms of dollars of the same purchasing power.

d. is meaningful only if the numerator is

greater than the denominator.

72. A liquidity ratio measures the

a. income or operating success of an enterprise

over a period of time.

b. ability of the enterprise to survive over a

long period of time.

c. short-term ability of the enterprise to pay

its maturing obligations and to meet unexpected needs for cash.

d. number of times interest is earned.

73. 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.

74. The acid-test (quick) ratio

a. is used to quickly determine a company’s

solvency and long-term debt paying ability.

b. relates cash, short-term investments, and net

receivables to current liabilities.

c. is calculated by taking one item from the

income statement and one item from the balance sheet.

d. is the same as the current ratio except it is

rounded to the nearest whole percent.

75. Blaney Clothing Store had a balance in the

Accounts Receivable account of $437,500 at the beginning of the year and a

balance of $500,000 at the end of the year. Net credit sales during the year

amounted to $3,000,000. The average collection period of the receivables in

terms of days was

a. 53.2 days.

b. 365 days.

c. 60.1 days.

d. 57 days.

76. Fess Hardware Store had net credit sales of

$8,500,000 and cost of goods sold of $5,000,000 for the year. The Accounts

Receivable balances at the beginning and end of the year were $600,000 and

$760,000, respectively. The accounts receivable turnover was

a. 7.4 times.

b. 5.9 times.

c. 11.2 times.

d. 12.5 times.