Use the Following to Answer Questions

question 48

Multiple Choice

Use the following to answer questions
Ness Company's sales were budgeted for the first six months of its fiscal year as follows:
Sales are 40% cash and 60% credit. Management estimates that two-thirds of credit sales will be collected in the month of sale with the balance collected the following month.
-Cash collections during March are estimated at:

• A)$608,000
• B)$524,260
• C)$550,000
• D)$692,000

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Definitions:

Earnings Per Share

A financial ratio that measures the amount of a company's net income allocated to each share of common stock, indicating the company's profitability.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year, calculated as current assets divided by current liabilities.

Acid-Test Ratio

A financial metric used to determine a company's ability to pay off its short-term liabilities with its quick assets (cash, marketable securities, and receivables).

Account Payable

Represents the amount of money a company owes to its suppliers or creditors for goods and services received but not yet paid for.