The most important information needed to determine if companies can pay their current obligations is the a. net income for this year. b. projected net income for next year. c. relationship between current assets and current liabilities. d. relationship between short-term and long-term liabilities.

The most important information needed to determine if companies can pay their current  obligations is the
a. net income for this year.
b. projected net income for next year.
c. relationship between current assets and current liabilities.
d. relationship between short-term and long-term liabilities.
by

1 Answer

Answer :

c. relationship between current assets and current liabilities.
by

Related questions

Current liabilities a. are obligations that the company is to pay within the forthcoming year. b. are listed in the balance sheet in order of their expected maturity. c. are listed in the balance sheet, starting with accounts payable. d. should not include long-term debt that is expected to be paid within the next year.

Description : Current liabilities a. are obligations that the company is to pay within the forthcoming year. b. are listed in the balance sheet in order of their expected maturity. c. are listed in the balance sheet, ... . d. should not include long-term debt that is expected to be paid within the next year.

Last Answer : a. are obligations that the company is to pay within the forthcoming year. b. are listed in the balance sheet in order of their expected maturity.

Closing entries are made a. in order to terminate the business as an operating entity. b. so that all assets, liabilities, and Stockholders' equity accounts will have zero balances when the next accounting period starts. c. in order to transfer net income (or loss) and dividends to the retained earnings account. d. so that financial statements can be prepared.

Description : Closing entries are made a. in order to terminate the business as an operating entity. b. so that all assets, liabilities, and Stockholders' equity accounts will have zero balances when the ... ) and dividends to the retained earnings account. d. so that financial statements can be prepared.

Last Answer : c. in order to transfer net income (or loss) and dividends to the retained earnings account. unt.

Net capital employed is equal to --------------- a) Total assets minus liabilities b) Fixed asset plus net working capital c) Total asset minus long-term liabilities d) Total assets

Description : Net capital employed is equal to --------------- a) Total assets minus liabilities b) Fixed asset plus net working capital c) Total asset minus long-term liabilities d) Total assets

Last Answer : b) Fixed asset plus net working capital

The relationship between current assets and current liabilities is important in evaluating a company's a. profitability. b. liquidity. c. market value. d. accounting cycle.

Description : The relationship between current assets and current liabilities is important in evaluating a company's a. profitability. b. liquidity. c. market value. d. accounting cycle.

Last Answer : b. liquidity.

Current assets are Rs.6,00,000 current liabilities are Rs.3,00,000 the debtors realized Rs.40,000, the impact on net working capital would be------------------------- a) No change in working capital b) Decrease of working capital by Rs.80,000 c) Increase of working capital by Rs.40,000 d) None of these

Description : Current assets are Rs.6,00,000 current liabilities are Rs.3,00,000 the debtors realized Rs.40,000, the impact on net working capital would be------------------------- a) No change in working ... Decrease of working capital by Rs.80,000 c) Increase of working capital by Rs.40,000 d) None of these

Last Answer : a) No change in working capital

The sub-classifications on the company’s classified balance sheet would include all of the following except: a. Current Assets. b. Property, Plant, and Equipment. c. Current liabilities. d. Long-term Assets.

Description : The sub-classifications on the company’s classified balance sheet would include all of the following except: a. Current Assets. b. Property, Plant, and Equipment. c. Current liabilities. d. Long-term Assets.

Last Answer : d. Long-term Assets.

The relationship between total outside liabilities and total assets can be indicated through ------------ a) Fixed asset ratio b) Solvency ratio c) Fixed asset turn over ratio d) Proprietary ratio

Description : The relationship between total outside liabilities and total assets can be indicated through ------------ a) Fixed asset ratio b) Solvency ratio c) Fixed asset turn over ratio d) Proprietary ratio

Last Answer : b) Solvency ratio

Income tax payable come under ------------------ a) Long term liability b) Long term fund c) Current liability d) Other liabilities

Description : Income tax payable come under ------------------ a) Long term liability b) Long term fund c) Current liability d) Other liabilities

Last Answer : c) Current liability

In financial accounting of a chemical plant, which of the following relationship is invalid? (A) Assets = equities (B) Assets = liabilities + net worth (C) Total income = costs + profits (D) Assets = capital

Description : In financial accounting of a chemical plant, which of the following relationship is invalid? (A) Assets = equities (B) Assets = liabilities + net worth (C) Total income = costs + profits (D) Assets = capital

Last Answer : (D) Assets = capital

Current liabilities are equals to------------------------------- a) Working capital +current assets b) Working capital-current assets c) Current assets-working capital d) Current asset + working capital

Description : Current liabilities are equals to------------------------------- a) Working capital +current assets b) Working capital-current assets c) Current assets-working capital d) Current asset + working capital

Last Answer : c) Current assets-working capital

Working capital is expressed as------ a) Current asset-fixed asset b) Fixed assets-current liabilities c) Current assets-current liabilities d) None of these

Description : Working capital is expressed as------ a) Current asset-fixed asset b) Fixed assets-current liabilities c) Current assets-current liabilities d) None of these

Last Answer : c) Current assets-current liabilities

Cash from operations is equal to------------------ a) net profit afer tax b) net profit plus increase in current asset c) net profit plus decrease in current liabilities d) net profit plus non-cash expenses plus decrease in current

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Last Answer : d) net profit plus non-cash expenses plus decrease in current

___________ items are assets and liabilities other than monetary items.

Description : ___________ items are assets and liabilities other than monetary items.

Last Answer : Non-monetary,

Monetary items _________ (a) Are assets and liabilities to be received or paid in money (b) Are assets to be received in fixed or determinable amounts of money (c) Are money held and assets and liabilities to be received or paid in fixed or determinable amounts of money (d) None of the above

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Last Answer : Are money held and assets and liabilities to be received or paid in fixed or determinable amounts of money

Monetary items are defined by AS 11 as assets and liabilities other than non-monetary items.

Description : Monetary items are defined by AS 11 as assets and liabilities other than non-monetary items.

Last Answer : FALSE

Financial Statements provide a summary of -------------------------- a) Accounts b) Assets c) Liabilities d) Expenses

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Last Answer : a) Accounts

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Last Answer : B. Current assets of the typical manufacturing firm account for over half of its total assets.

The ratio that shows the relationship between fixed asset to share holders fund a) Fixed asset to net worth b) Fixed asset ratio c) Fixed assets turn over ratio d) Net worth ratio

Description : The ratio that shows the relationship between fixed asset to share holders fund a) Fixed asset to net worth b) Fixed asset ratio c) Fixed assets turn over ratio d) Net worth ratio

Last Answer : a) Fixed asset to net worth

Which of the following illustrates the use of a hedging approach to financing assets? A. Temporary current assets financed with long-term liabilities. B. Permanent working capital financed with long-term liabilities. C. Short-term assets financed with equity D. All assets financed with a mixture of 50% equity and 50% long-term debt

Description : Which of the following illustrates the use of a hedging approach to financing assets? A. Temporary current assets financed with long-term liabilities. B. Permanent working capital financed with long-term ... equity D. All assets financed with a mixture of 50% equity and 50% long-term debt

Last Answer : B. Permanent working capital financed with long-term liabilities.

Liabilities are generally classified on a balance sheet as a. small liabilities and large liabilities. b. present liabilities and future liabilities. c. tangible liabilities and intangible liabilities. d. current liabilities and long-term liabilities.

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Last Answer : d. current liabilities and long-term liabilities.

Current ratio shows----- a) The change in gross profit b) The working capital position c) The liquidity of assets d) The change in net profit

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Description : aAfter gross profit is calculated, operating expenses are deducted to determine a. gross margin. b. operating income. c. gross profit on sales. d. net margin.

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What are total long-term liabilities at December 31, 2008? a. $0 b. $70,000 c. $88,000 d. $90,000

Description : What are total long-term liabilities at December 31, 2008? a. $0 b. $70,000 c. $88,000 d. $90,000

Last Answer : a. $0

Land held for future use will be reported in the ____________ section of a classified balance sheet. a. Long-term assets. b. Long-term investments. c. Property, Plant and Equipment. d. Current assets..

Description : Land held for future use will be reported in the ____________ section of a classified balance sheet. a. Long-term assets. b. Long-term investments. c. Property, Plant and Equipment. d. Current assets..

Last Answer : b. Long-term investments.

Intangible assets are a. listed under current assets on the balance sheet. b. not listed on the balance sheet because they do not have physical substance. c. noncurrent resources. d. listed as a long-term investment on the balance sheet.

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When the liquated company has adequate cash to pay off all liabilities , the interest on liabilities should be paid : a) Upto the date of commencement of insolvency proceedings b) Upto the date of actual payment of liabilities c) Upto the date of payment to shareholders d) None of the these

Description : When the liquated company has adequate cash to pay off all liabilities , the interest on liabilities should be paid : a) Upto the date of commencement of insolvency proceedings b) Upto the date of actual payment of liabilities c) Upto the date of payment to shareholders d) None of the these

Last Answer : d) None of the these

Net working capital refers to A. total assets minus fixed assets B. current assets minus current liabilities C. current assets minus inventories D. current

Description : Net working capital refers to A. total assets minus fixed assets B. current assets minus current liabilities C. current assets minus inventories D. current

Last Answer : B. current assets minus current liabilities

The __________ of a chemical company can be obtained directly from the balance sheet as the difference between current assets and current liabilities. (A) Cash ratio (B) Net working capital (C) Current ratio

Description : The __________ of a chemical company can be obtained directly from the balance sheet as the difference between current assets and current liabilities. (A) Cash ratio (B) Net working capital (C) Current ratio

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Net Assets of D.Co. for Purchase Consideration worth Rs. 4,00,000. At the time of absorption, the company has paid 32,000 equity shares each of Rs.10 each at 10% premium, then remaining cash will be - (A) Rs. 48,000 (B) Rs. 84,000 (C) Rs. 80,000 (D) Rs. 90,000

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Last Answer : (A) Rs. 48,000

Kirti Co’s Balance Sheet shows Fixed Asset Rs. 3,60,000. At the time of absorption calculation of Net Assets is 10% less than the market value, then market value of such fixed assets is ............ (A) Rs. 3,24,000 (B) Rs. 4,00,000 (C) Rs. 4,20,000 (D) None of these

Description : Kirti Co’s Balance Sheet shows Fixed Asset Rs. 3,60,000. At the time of absorption calculation of Net Assets is 10% less than the market value, then market value of such fixed assets is ............ (A) Rs. 3,24,000 (B) Rs. 4,00,000 (C) Rs. 4,20,000 (D) None of these

Last Answer : (B) Rs. 4,00,000

Himanshi Ltd. purchase consideration is Rs.22,345 and Net Assets Rs.6,568, then........... (A) Goodwill Rs. 15,777 (B) Capital Reserve Rs. 15,777 (C) Goodwill Rs. 28,913 (D) Capital Reserve Rs. 28,913

Description : Himanshi Ltd. purchase consideration is Rs.22,345 and Net Assets Rs.6,568, then........... (A) Goodwill Rs. 15,777 (B) Capital Reserve Rs. 15,777 (C) Goodwill Rs. 28,913 (D) Capital Reserve Rs. 28,913

Last Answer : (A) Goodwill Rs. 15,777

Net Assets minus Capital Reserve is _________ (A) Goodwill (B) Total assets (C) Purchase consideration (D) None of these

Description : Net Assets minus Capital Reserve is _________ (A) Goodwill (B) Total assets (C) Purchase consideration (D) None of these

Last Answer : (C) Purchase consideration

When the Net Assets are less than the Purchase Consideration, the difference will be (A) Debited to Goodwill A/c (B) Debited to General Reserve (C) None of these

Description : When the Net Assets are less than the Purchase Consideration, the difference will be (A) Debited to Goodwill A/c (B) Debited to General Reserve (C) None of these

Last Answer : (A) Debited to Goodwill A/c

When the Net Assets are less than the Purchase Consideration, the difference will be (A) Debited to Goodwill A/c (B) Debited to General Reserve (C) None of these (D) Debited to Capital Reserve

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Last Answer : While calculating purchase consideration ............... values of assets is to be considered. (A) Book value (B) Revalued price (C) Average price (D) Capital

The assets which is not taken under the net assets method of calculating Purchase Consideration is: (A) Loose Tools (B) Bills Receivable (C) Machinery (D) Share issued expenses

Description : The assets which is not taken under the net assets method of calculating Purchase Consideration is: (A) Loose Tools (B) Bills Receivable (C) Machinery (D) Share issued expenses

Last Answer : (D) Share issued expenses

Which of the following statement is correct? (A) The amount of Goodwill or Capital Reserve is recorded in the books of purchasing company only (B) The amount of Goodwill or Capital Reserve is recorded in the books of vendor company only. (C) Goodwill = Net Assets – Purchase price (D) The face value of shares of purchasing company will be taken in to account while calculating purchase consideration.

Description : Which of the following statement is correct? (A) The amount of Goodwill or Capital Reserve is recorded in the books of purchasing company only (B) The amount of Goodwill or Capital ... value of shares of purchasing company will be taken in to account while calculating purchase consideration.

Last Answer : The amount of Goodwill or Capital Reserve is recorded in the books of purchasing company only

In computing purchase consideration by ‘net asset method’ all assets including fictitious assets should be considered.

Description : In computing purchase consideration by ‘net asset method’ all assets including fictitious assets should be considered.

Last Answer : FALSE

. The first item listed under current liabilities is usually a. accounts payable. b. notes payable. c. salaries payable. d. taxes payable.

Description : . The first item listed under current liabilities is usually a. accounts payable. b. notes payable. c. salaries payable. d. taxes payable.

Last Answer : b. notes payable.

Decrease in current liabilities --------------------working capital a) Increases b) Decrease c) Deducts d) Reduces

Description : Decrease in current liabilities --------------------working capital a) Increases b) Decrease c) Deducts d) Reduces

Last Answer : a) Increases

Increases in current liabilities --------------working capital a) Increase b) Decreases c) Added d) None of these

Description : Increases in current liabilities --------------working capital a) Increase b) Decreases c) Added d) None of these

Last Answer : b) Decreases

Current ratio is 4:1, the amount of current liabilities is Rs.12000 the amount of working capital is----- a) Rs.48,000 b) Rs.36000 c) Rs.30000 d) Rs.60000

Description : Current ratio is 4:1, the amount of current liabilities is Rs.12000 the amount of working capital is----- a) Rs.48,000 b) Rs.36000 c) Rs.30000 d) Rs.60000

Last Answer : a) Rs.48,000

The ratio of liquid asset to current liabilities a) Quick ratio b) Current ratio c) Absolute liquid ratio d) Combined ratio

Description : The ratio of liquid asset to current liabilities a) Quick ratio b) Current ratio c) Absolute liquid ratio d) Combined ratio

Last Answer : a) Quick ratio

The ratio which depicts the relationship between two items,one of which is drawn from the Balance Sheet and the other from the revenue account a) Current ratio b) Equity Ratio c) Net Profit ratio d) Debtors Turn over Ratio

Description : The ratio which depicts the relationship between two items,one of which is drawn from the Balance Sheet and the other from the revenue account a) Current ratio b) Equity Ratio c) Net Profit ratio d) Debtors Turn over Ratio

Last Answer : d) Debtors Turn over Ratio

The ratio which shows the relationship b/w share holder’s fund and total assets a) Debit equity ratio b) Proprietary ratio c) Solvency ratio d) Fixed asset

Description : The ratio which shows the relationship b/w share holder’s fund and total assets a) Debit equity ratio b) Proprietary ratio c) Solvency ratio d) Fixed asset

Last Answer : b) Proprietary ratio

Long term solvency of a firm can be measured by a) Current ratio b) Net profit ratio c) Gross profit ratio d) Debt equity ratio

Description : Long term solvency of a firm can be measured by a) Current ratio b) Net profit ratio c) Gross profit ratio d) Debt equity ratio

Last Answer : d) Debt equity ratio

Which of the following is not a true statement about a multiple-step income statement? a. Operating expenses are often classified as selling and administrative expenses. b. There may be a section for nonoperating activities. c. There may be a section for operating assets. d. There is a section for cost of goods sold.

Description : Which of the following is not a true statement about a multiple-step income statement? a. Operating expenses are often classified as selling and administrative expenses. b. There may be a section for nonoperating ... be a section for operating assets. d. There is a section for cost of goods sold.

Last Answer : c. There may be a section for operating assets.

The primary source of revenue for a wholesaler is a. investment income. b. service fees. c. the sale of merchandise. d. the sale of fixed assets the company owns.

Description : The primary source of revenue for a wholesaler is a. investment income. b. service fees. c. the sale of merchandise. d. the sale of fixed assets the company owns.

Last Answer : c. the sale of merchandise.

Under net assets method , accumulated profits should not form part of liabilities.

Description : Under net assets method , accumulated profits should not form part of liabilities.

Last Answer : TRUE

Gross assets are Rs.1,01,000, fictitious assets Rs.350 are included in the gross assets. External liabilities are Rs.7,500. 6% prefer share capital is Rs.45,000. Equity capital is 4,500 equity shares of Rs.10 each fully paid. Average expected profit is Rs.8,500. Transfer to reserves is 10%. Pref. dividend is payable. NRR is 9%. The Net Asset Value Per share is A Rs.11 B Rs.10.70 C Rs.15 D Rs.20s

Description : Gross assets are Rs.1,01,000, fictitious assets Rs.350 are included in the gross assets. External liabilities are Rs.7,500. 6% prefer share capital is Rs.45,000. Equity capital is 4,500 equity shares of Rs.10 each fully ... . The Net Asset Value Per share is A Rs.11 B Rs.10.70 C Rs.15 D Rs.20

Last Answer : Rs.10.70