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 UETRRNC2. The word pertaining to a company's ability to pay its obligations when due.
LIQUIDITY LITDQYUII3. 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 CLYEC4. The total amount of current assets divided by the total amount of current liabilities is the current ___________.
RATIO TIAOR5. A retailer's current asset that is not included in the calculation of its quick ratio.
INVENTORY NNROVYIET7. The cost of goods sold is more logical than using sales when computing a company's ______ sales in inventory.
DAYS SAYD8. A company's average ____________ period is calculated by dividing 360 or 365 days by its receivable turnover ratio.
COLLECTION CNOOLELCTI9. A company's cost of goods sold divided by its average inventory is its inventory _____________ ratio.
TURNOVER NRTVEOUR10. 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 MSTADTEEI11. A company's _______ of accounts receivable sorts the customers' open balances according to the date when the money should be collected.
AGING GANGI12. The calculation of the inventory turnover ratio is more accurate when the amount of inventory is the ____________ amount during the entire year.
AVERAGE AEGVERA13. A company's operating cycle is the total of the days' sales in inventory and the days' sales in accounts _______________.
RECEIVABLE LREEBAIVCE14. Accounts receivable and accounts payable will appear on the balance sheet of a corporation using this accounting method (or basis) of accounting.
ACCRUAL AUCRACL15. 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 NSDEERCUU16. 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 AIONGTERP17. If inventory increases during the accounting period, the amount of the change will appear on the statement of cash flows in _________________ .
PARENTHESES SEEASPTNHER18. 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 ENELVE20. The operating cash flow ratio is calculated by dividing a company's net cash provided by operating activities by the average amount of current ______________.
LIABILITIES EIISTIBILLAFeatured Review
"I can't believe how much more confidence AccountingCoach PRO has given me, and I never want to be without it! I received my degree in accounting, but still found that I had questions, and did not feel confident in my abilities to perform in my new position as an accountant in a small contract manufacturing company. Because of this, I purchased the PRO version so that I could study sections I was not clear about and then test my knowledge. Being able to keep track of what you have studied is great, but what I love most is that I am able to figure out what I need more help in with the tests, and then use the flashcards to help me understand those areas better—so much so that I have challenged decisions from our controller, and was able to intelligently discuss my reasoning and be granted permission for change. Any person wanting to become a bookkeeper or accountant would benefit from using AccountingCoach, but having the PRO version takes it to the next level! Oh, by the way—I started as the staff accountant, and have since been promoted to Assistant Controller and will be promoted again to Controller when our current controller retires in less than a year. Thank you!" - Anna W.
Join PRO or PRO Plus and Get Lifetime Access to Our Premium Materials
Read all 2,645 reviewsWe now offer 10 Certificates of Achievement for Introductory Accounting and Bookkeeping: