1. In a manufacturing firm, which are the most importantaccounts to analyze for liquidity problems?
a. Cash account on the balance sheet
b. Cash, Accruals, Prepaid, and Accounts Receivable
c. Notes Payable, Cash, and Accounts Payable
d. Accounts Receivable, Inventory, and Accounts Payable
2. Golf Inc. and Golfanatics Corp. are close competitors. Lastyear, both had the same level of cost of goods sold, but Golf Inc.turned its inventory over five times during the year, whereasGolfanatics turned its inventory over every 65 days. If theobjective is to keep low inventory, which of the following istrue?
- Golf Inc., did a better job because its inventory turnover waslower
- Golfanatics did a better job because its inventory turnoverwas higher
- Golf Inc., did a better job because its day sales in inventorywas lower
- Golf Inc., did a better job because its level of inventory waslower was lower
