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 RTUNCRE2. The word pertaining to a company's ability to pay its obligations when due.
LIQUIDITY YIDTUQIIL3. 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 ECCYL4. The total amount of current assets divided by the total amount of current liabilities is the current ___________.
RATIO TROIA5. A retailer's current asset that is not included in the calculation of its quick ratio.
INVENTORY YONRTEVIN7. The cost of goods sold is more logical than using sales when computing a company's ______ sales in inventory.
DAYS SDYA8. A company's average ____________ period is calculated by dividing 360 or 365 days by its receivable turnover ratio.
COLLECTION LLCCIETONO9. A company's cost of goods sold divided by its average inventory is its inventory _____________ ratio.
TURNOVER TURNOEVR10. 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 ESMTIEDTA11. A company's _______ of accounts receivable sorts the customers' open balances according to the date when the money should be collected.
AGING NGGAI12. The calculation of the inventory turnover ratio is more accurate when the amount of inventory is the ____________ amount during the entire year.
AVERAGE VGAEERA13. A company's operating cycle is the total of the days' sales in inventory and the days' sales in accounts _______________.
RECEIVABLE EIRBELECAV14. Accounts receivable and accounts payable will appear on the balance sheet of a corporation using this accounting method (or basis) of accounting.
ACCRUAL AARCCUL15. 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 SREUUCNDE16. 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 PONGTAERI17. If inventory increases during the accounting period, the amount of the change will appear on the statement of cash flows in _________________ .
PARENTHESES AERHNPSSTEE18. 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 VNEELE20. 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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