Reference no: EM132934252

Problem 1: The acid test ratio is the same as the accounts receivable turnover calculation.

1-True

2-False

Problem 2: One of several indexes that reflects the solvency or long-term health of an organization, includes:

1-Acid-test ratio.

2-Days' sales in inventory.

3-Current ratio.

4-Total asset turnover.

5-Times interest earned ratio.

Problem 3: External users of accounting information make the strategic and operational decisions of a company.

1-True

2-False

Problem 4: It would be unethical to present financial statements in a misleading manner with the intention of skewing investors' opinion of a company.

1-True

2-False

Problem 5: Adequate internal controls are necessary to prevent fraud. One control to use in relation to accounts receivable is:

1-Have the same employee deposit checks at the bank and send them to clients' accounts to minimize payroll expenses

2-Have an employee deposit checks at the bank and have a different posting on customer accounts

3-Have customers pay cash only and accept no checks to ensure customer accounts are updated quickly

4-Have customers mail in cash and checks to the accounts receivable manager only to ensure the customer account is updated properly