A Company Had Net Cash Flows from Operations of $120,000,total

question 121

Multiple Choice

A company had net cash flows from operations of $120,000,total cash flows of $500,000,and average total assets of $2,500,000.The cash flow on total assets ratio equals:

• A)4.8%
• B)5.0%
• C)20.0%
• D)20.8%
• E)24.0%

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Definitions:

Accounts Receivable

Money owed to a business by its customers for goods or services delivered or used but not yet paid for.

Short-Term Notes Receivables

Short-duration financial assets representing amounts owed to a company that must be paid within a year.

Allowance Account

An accounting practice used to create a buffer for potential future losses on receivables, also known as a provision for doubtful debts.

Gross Realizable Value

The estimated selling price of goods minus any costs associated with the completion and sale of those goods.