Accounting Quiz or Test Your Accounting Knowledge On The Operating Cycle and Working Capital Ratios

1.0    What is the “ cash cycle”

2.0    What is:-

(a)    a finished goods stock turnover period?

(b)   a debtors turnover period

How are they calculated?

3.0    A lengthening of the cash cycle will result in a smaller volume of working capital. True or false?

4.0    Define:-

(a)  the current ratio

(b)   the quick ratio

5.0 A decrease in creditors has the effect of increasing the cash balance. True or false?

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