8. A company reported annual sales revenue (all on credit) of $1,800,000. During

Question

8. A company reported annual sales revenue (all on credit) of $1,800,000. During oheo year, accounts receivable decreased from a $56,000 beginning balance to ending balance. a $48,000 How much is cash received from customers during the year? A) $1,964,000 B) $1,808,000 C) $1,796,000 D) $1,820,000 9. All things equal, increasing asset turnover, increases A) Sales B) Profit Margin C) Assets D) Return on Equity 10. Which of the following companies is most likely to have the highest inventory turnover ratio? A) Kentucky Fried Chicken franchises. B) Candy manufacturer C) Wal-Mart. D) Mercedes Benz dealership.

Explanation / Answer

Answer 8 Calculation of cash received from customers during the year Beginning balance of Accounts receivables $56,000.00 Add: Credit sales $1,800,000.00 Less : Ending balance of Accounts Receivables $48,000.00 Cash received from Customers $1,808,000.00 The answer is Option B. Answer 9 All things equal , increasing asset turnover , increases Assets. The answer is Option C. Answer 10 The answer is Option A,B and C. These companies most likely to have highest inventory turnover ratio as they always maintain low level of inventory but their sales are high.

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