1. The excess of current assets over current liabilities is called:

A. current ratio

B. net assets

C. working capital


2. Which of the following is a contra asset account?

A. Bad debt expense

B. Doubtful debt allowance

C. Trade receivables


3. In order to analyze what portion of company’s assets are liquid, an analyst is most likely to use:

A. cash ratio.
B. common-size balance sheet.
C. current ratio.


Tomorrow’s questions of the day will be on the topic of R27: Understanding Cash Flow Statements

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