Quiz – Current Ratio
Intermediate Accounting
Spiceland, Nelson, and Thomas
10th Edition
The current ratio is calculated as how:
The current ratio is calculated as how:
You are provided with a balance sheet for Games Inc. along with the value of retained earnings. You are asked to determine whether the company would be able to buy an asset with a cost of $200,000.
Find the debt to equity ratio.
Your numbers will vary.
Analysts following Howe Industries discovered that relative to the prior year, the firm’s cash provided from operations increased, yet cash, as reported, decreased. Which of the following factors could explain this outcome?a. The firm reduced or cut its dividend.b. The company made large investments in fixed assets.c. The firm sold a division and received cash…
What amount should be included in the current liabilities section of the company’s balance sheet? You are given accounts payable, bonds payable, salaries payable, notes payable due in 1 year and notes payable due in 5 years.
Your numbers will vary.
Liquidity refers to what:
Assume a company’s liquidity ratio is less than 1 before it purchases inventory on credit. What is the effect when it makes a purchase:
Asks which is a long-term asset
The Management’s Discussion and Analysis section of the annual report (required by the SEC) can be described as:
Which of the following factors would explain why Michigan Energy’s cash increased if it had a negative cash flow last year?a. The company sold a new issue of bonds.b. The firm heavily invested in plant and equipment.c. The firm paid an enormous dividend.d. The firm incurred high depreciation charges.e. The company repurchased 20% of its…