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on the balance sheet in the section with the heading current assets. Current assets are listed in the order in which they are expected to turn to cash. This is known as the order of liquidity. Since cash is the most...

DIVIDED BY current liabilities. 4. The quick ratio EXCLUDES which of the following? Accounts Receivable Wrong. The quick ratio includes Cash, Temporary Investments, and Accounts Receivable—the items that can be turned...

on the company’s balance sheet. Examples include a highly-respected trade name, a valuable patent, a very effective management team and company culture. Example of Assets Examples of assets that are likely to be...

of each accounting year and will begin the following year with zero balances.) Examples of Balance Sheet Accounts Examples of a corporation’s balance sheet accounts include Cash, Temporary Investments, Accounts...

a key component of a company’s working capital and the current ratio. Examples of Current Assets Examples of current assets and the typical order of liquidity include: Cash and cash equivalents (which includes...

Income or revenue earned by a company that is outside of its main operating activities. For a retailer the interest earned on its temporary investments is a nonoperating revenue (or nonoperating income).

Cash and other resources that are expected to turn to cash or to be used up within one year of the balance sheet date. (If a company’s operating cycle is longer than one year, an item is a current asset if it will...

, currency, and undeposited checks from customers (if the checks are not postdated) Petty cash Cash equivalents, such as U.S. Treasury Bills which were purchased within 90 days of their maturity Temporary investments,...

Our Explanation of Financial Ratios includes calculations and descriptions of 15 financial ratios. As you calculate the financial ratios you will also gain a deeper understanding of a company's operations and financial...

Our Explanation of Working Capital and Liquidity provides you with an in-depth look at the components of working capital and the challenges of converting current assets to cash before obligations come due. You will see...

Our Explanation of Income Statement helps you learn the most important features of a corporation's income statement (also known as the statement of operations or profit and loss statement). We provide more understanding...

Our Explanation of Bookkeeping provides you with a rich understanding of the recording of transactions. It then discusses the additional steps necessary for preparing accurate financial statements. This is great for...

Our Explanation of Financial Statements provides you with the highlights of each of the five external financial statements issued by U.S. corporations. Our insights will give you a good understanding of what the...

Our Explanation of Working Capital and Liquidity provides you with an in-depth look at the components of working capital and the challenges of converting current assets to cash before obligations come due. You will see...

Our Explanation of the Balance Sheet provides you with a basic understanding of a corporation's balance sheet (or statement of financial position). You will gain insights regarding the assets, liabilities, and...

The long term asset category of a classified balance sheet which appears immediately after the current assets. Listed in this category would be a bond sinking fund, funds held for construction, the cash surrender value...

Under the accrual basis of accounting, this account reports the cost of the temporary help services that a company used during the period indicated on its income statement.

What is a temporary account? Author: Harold Averkamp, CPA, MBA Definition of Temporary Account A temporary account is a general ledger account that begins each accounting year with a zero balance. Then at the end of the...

Is depreciation a temporary account? Author: Harold Averkamp, CPA, MBA Definition of Depreciation Accounts There are two types of general ledger accounts in which depreciation is recorded: Depreciation Expense which is a...

Accounts that are closed at the end of each accounting year. Included are the income statement accounts (revenues, expenses, gains, losses), summary accounts (such as income summary), and a sole proprietor’s...

Evaluating Business Investments Quiz and Test | AccountingCoach Evaluating Business Investments(Practice Quiz) Download PDF Author: Harold Averkamp, CPA, MBA For multiple-choice and true/false questions, simply...

The amount by which the proceeds from the sale of investments exceeded the carrying amount of the investments that were sold. It is reported as a non-operating or “other” item on a multiple-step income...

Evaluating Business Investments Author: Harold Averkamp, CPA, MBA 45 Q&A Popular Recent How do you calculate the payback period? What is financial leverage? What is cost accounting What is capital budgeting? What is...

. (The owner’s drawing account is a temporary account because its balance is closed to the owner’s capital account at the end of each year in order to begin the next year with a $0 balance.) Examples of permanent...

What is the acid test ratio? Author: Harold Averkamp, CPA, MBA Definition of Acid Test Ratio The acid test ratio, which is also known as the quick ratio, compares the total of a company’s cash, temporary marketable...

The amounts earned on money invested. Often this is interest and dividends earned on a company’s investment in stocks and bonds of other companies.

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