SECTION I $-$ A Multiple Choice

Working Capital Ratios.

KYC a newly incorporated company has an annual sales of AED. $1,000,000$ for the year ended $31$ December $2014.$ From the total sales AED. $450,000$ are cash sales. The receivable balance as at year end amounts to AED. $200,000.$ What is the debtor turnover days $-$ nearest days $($based on the above calculation$)?$

a$.133$ days

$($b$)164$ days

c$.237$ days

d$.$ Note of the above

The trader is into whole sale of computer equipment. He recently sold one of his printing machines which were appearing as a fixed asset. Help trader as to where he should record the proceeds from sale of printing machines in the statement of cash flows. Choose one of the following options?

a$.$ Operating

$($b$.$ Financing

c$.$ Investing

In a statement of cash flow a decreased in inventory should be reported as:

$($a$.$ A deduction from net income in determining cash flow from operating activities.

b$.$ An addition to net income in determining cash flow from operating activities.

c$.$ An investing activity.

d$.$ Not to be reported.

John has to present his board with some working capital ratios and he has asked your help in below scenario:

As of $31$ December $2012$ John has current assets of AED. $100,000,$ inventory of AED. $25,000$ advances to suppliers of AED. $35,000.$ Current liabilities amounting to AED. $60,000.$ What will be the quick ratio computation based on the above transaction?

a$.0\mathrm{.}6$:$1$

b $2\mathrm{.}7\mathrm{.}1$

c$.2\mathrm{.}1$:$1$

d$.$ None of the above

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