Accounting

Accounting standards:

Allow companies to omit the statement of cash flows from a complete set of financial statements if cash is an insignificant asset

Require that companies omit the statement of cash flows from a complete set of financial statements if the company has no investing activities

Require that companies include a statement of cash flows in a complete set of financial statements

Allow companies to include the statement of cash flows in a complete set of financial statements if the cash balance makes up more than 50% of the current assets

Allow companies to omit the statement of cash flows from a complete set of financial statements if the company has no financing activities

 

47. A component of operating efficiency and profitability, calculated by expressing net income as a percent of net sales is equal to the:

Acid-test ratio

Merchandise turnover

Price earnings ratio

Accounts receivable turnover

Profit margin ratio

 

48. The statement of cash flows reports:

Assets, liabilities and equity

Revenues, gains, expenses and losses

Cash inflows and outflows for an accounting period

Equity, net income and dividends

Changes in equity

 

49. A company has a profit margin of 12%. If net income is equal to $450,000 and average total asset is equal to $600,500, how much are sales?

$1,050,500

$126,060

$72,060

$54,000

$3,750,000

 

50. Current assets divided by current liabilities is equal to the

Current ratio

Quick ratio

Debt ratio

Liquidity ratio

Solvency ratio

 

Solution: