1)

What is the current ratio?

A)

2.75: 1

B)

2.5: 1

C)

2.00 : 1

D)

0.51: 1

2.

Debt and obligations of a business are referred to as

A)

equities.

B)

liabilities.

C)

assets.

D)

expenses.

3.

On a classified balance sheet, companies usually list current assets

A)

in alphabetical order.

B)

with the largest dollar amounts first.

C)

in the order of acquisition.

D)

in the order in which they are expected to be converted into cash.

4.

To show how successfully your business performed during a period of time, you would report its revenues and expense in the

A)

balance sheet.

B)

retained earnings.

C)

statement of cash flows.

D)

income statement retained.

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Answers:

Ans. 1.

Current ratio is a liquidity and efficiency ratio. It is used to measures ability to pay off its short-term liabilities with its current assets by the firms. High the ratio means firm can make current debt payments easily. High the ration will prefer. I prefer 2.75 : 1.

Ans.2.

- B) liabilities.

Debt and obligations of a business are referred to as liablility. Debt and obligations have to be paid as per the term and obligations between parties.

Ans.3.

D) in the order in which they are expected to be converted into cash.

On a classified balance sheet, companies usually list current assets in the order in which they are expected to be converted into cash.

Ans. 4.

D) income statement retained.

To show how successfully your business performed during a period of time, you would report its revenues and expense in the income statement retained.

1) What is the current ratio? A) 2

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1)	What is the current ratio?
	A)	2.75: 1
	B)	2.5: 1
	C)	2.00 : 1
	D)	0.51: 1

2.	Debt and obligations of a business are referred to as
	A)	equities.
	B)	liabilities.
	C)	assets.
	D)	expenses.

3.	On a classified balance sheet, companies usually list current assets
	A)	in alphabetical order.
	B)	with the largest dollar amounts first.
	C)	in the order of acquisition.
	D)	in the order in which they are expected to be converted into cash.

4.	To show how successfully your business performed during a period of time, you would report its revenues and expense in the
	A)	balance sheet.
	B)	retained earnings.
	C)	statement of cash flows.
	D)	income statement retained.