Reference no: EM132594741

Question 1: The balance sheet of Rosie Ltd. includes the following entries: inventory £25,000, trade receivables £12,000, cash £11,000 and current liabilities £25,000 (made up of trade payables £16,000, short-term borrowing £800 and £8,200 current tax payable). Calculate the quick ratio.

Option 1: 3

Option 2: 1.92

Option 3: 1

Option 4: 0.92

Question 2: Using the indirect method, which of the following accounting item would be added back to the operating profit in arriving at the operating cash flows?

Loss on disposal
Increase in trade receivables
Decrease in trade payables
Depreciation expenses charged to the income statement

Option 1: i only

Option 2: ii and iii only

Option 3: i and iv only

Option 4: iii only

Question 3: If the opening balance on trade receivable was £35,000 with a closing balance of £15,000 and the income statement reported revenue of £180,000, what is the cash collected from customers?

Option 1: £20,000

Option 2: £160,000

Option 3: £195,000

Option 4: £200,000