To see each answer, press or click on the blue "Unscramble" button. If you have difficulty answering the following questions, learn more about this topic by reading our Working Capital and Liquidity (Explanation).
1. Working capital is calculated using this category or classification of assets and liabilities.
CURRENT NRTUCER2. The word pertaining to a company's ability to pay its obligations when due.
LIQUIDITY ITIDIUQYL3. An asset is classified as current if it is expected to turn to cash within one year or within the operating _________, whichever is longer.
CYCLE CYLEC4. The total amount of current assets divided by the total amount of current liabilities is the current ___________.
RATIO TRAIO5. A retailer's current asset that is not included in the calculation of its quick ratio.
INVENTORY YETROINNV7. The cost of goods sold is more logical than using sales when computing a company's ______ sales in inventory.
DAYS YADS8. A company's average ____________ period is calculated by dividing 360 or 365 days by its receivable turnover ratio.
COLLECTION TIOCLLONEC9. A company's cost of goods sold divided by its average inventory is its inventory _____________ ratio.
TURNOVER RNORVTUE10. When a company's balance sheet reports account receivable – net, it means that the amount is after a deduction for an _____________ amount of uncollectible or doubtful accounts.
ESTIMATED MTSAIEEDT11. A company's _______ of accounts receivable sorts the customers' open balances according to the date when the money should be collected.
AGING AINGG12. The calculation of the inventory turnover ratio is more accurate when the amount of inventory is the ____________ amount during the entire year.
AVERAGE AAREVGE13. A company's operating cycle is the total of the days' sales in inventory and the days' sales in accounts _______________.
RECEIVABLE CELBERIEVA14. Accounts receivable and accounts payable will appear on the balance sheet of a corporation using this accounting method (or basis) of accounting.
ACCRUAL LRCUACA15. Company A purchased goods on account (on credit) from Company B. Until the amount is paid, Company B has what type of claim against Company A?
UNSECURED DCEURUSEN16. The changes in most of the working capital accounts will appear on the statement of cash flows in the section entitled cash flows from ______________ activities.
OPERATING PNTRIAOEG17. If inventory increases during the accounting period, the amount of the change will appear on the statement of cash flows in _________________ .
PARENTHESES SAHPETSNREE18. A company had net credit sales of $440,000 in the past year. During the year it had an average accounts receivable balance of $40,000. Its receivables turnover ratio was ______________ times.
ELEVEN ENLEEV20. The operating cash flow ratio is calculated by dividing a company's net cash provided by operating activities by the average amount of current ______________.
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