Multiple Choice Answers

What type of retail clothing store with the highest ratio of net sales to assets is most likely?

A. Men’s clothing

B. Home Appliances

 

A company with working capital of $500,000 receives cash for the entire balance on a $120,000 short-term note receivable (current asset). The working capital immediately after the receipt is

A) $380,000

B) $500,000

 

If the acid-test ratio is 1.25, the receipt of cash from the sale of marketable securities at their book value will cause the ratio to

A) decrease

B) not affected