Principles of Accounting Volume 1
19th Edition
ISBN: 9781947172685
Author: OpenStax
Publisher: OpenStax College
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Textbook Question
Chapter 2, Problem 17MC
A. asset utilization
B. amount of noncurrent liabilities
C. liquidity
D. amount of noncurrent assets
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Working capital is an indication of the firm’s ________.A. asset utilizationB. amount of noncurrent liabilitiesC. liquidityD. amount of noncurrent assets
Capital gearing ratio indicates the relationship between
A.
assets and capital
B.
loans and capital
C.
equity shareholders fund and long term borrowed funds
D.
debentures and share capital
Net working capital is defined as (select one):
A.
current assets minus current liabilities.
B.
a ratio measure of liquidity best used in cross-sectional analysis.
C.
current liabilities minus current assets.
D.
the portion of the firm's assets financed with short-term funds.
Chapter 2 Solutions
Principles of Accounting Volume 1
Ch. 2 - Which of these statements is not one of the...Ch. 2 - Stakeholders are less likely to include which of...Ch. 2 - Identify the correct components of the income...Ch. 2 - The balance sheet lists which of the following? A....Ch. 2 - Assume a company has a $350 credit (not cash)...Ch. 2 - Which of the following statements is true? A....Ch. 2 - Owners have no personal liability under which...Ch. 2 - The accounting equation is expressed as ________....Ch. 2 - Which of the following decreases owners equity? A....Ch. 2 - Exchanges of assets for assets have what effect on...
Ch. 2 - All of the following increase owners equity except...Ch. 2 - Which of the following is not an element of the...Ch. 2 - Which of the following is the correct order of...Ch. 2 - The three heading lines of financial statements...Ch. 2 - Which financial statement shows the financial...Ch. 2 - Which financial statement shows the financial...Ch. 2 - Working capital is an indication of the firms...Ch. 2 - Identify the four financial statements and...Ch. 2 - Define the term stakeholders. Identify two...Ch. 2 - Identify one similarity and one difference between...Ch. 2 - Identify one similarity and one difference between...Ch. 2 - Explain the concept of equity, and identify some...Ch. 2 - Explain the difference between current and...Ch. 2 - Identify/discuss one similarity and one difference...Ch. 2 - Name the three types of legal business structure....Ch. 2 - What is the accounting equation? List two examples...Ch. 2 - Identify the order in which the four financial...Ch. 2 - Explain how the following items affect equity:...Ch. 2 - Explain the purpose of the statement of cash flows...Ch. 2 - For each independent situation below, calculate...Ch. 2 - For each independent situation below, calculate...Ch. 2 - For each independent situation below, calculate...Ch. 2 - For each independent situation below, place an (X)...Ch. 2 - For each of the following items, identify whether...Ch. 2 - For the items listed below, indicate how the item...Ch. 2 - Forest Company had the following transactions...Ch. 2 - Here are facts for the Hudson Roofing Company for...Ch. 2 - Prepare an income statement using the following...Ch. 2 - Prepare a statement of owners equity using the...Ch. 2 - Prepare a balance sheet using the following...Ch. 2 - For each independent situation below, calculate...Ch. 2 - For each independent situation below, calculate...Ch. 2 - For each independent situation below, calculate...Ch. 2 - For each of the following independent situations,...Ch. 2 - For each of the following items, identify whether...Ch. 2 - For the items listed below, indicate how the item...Ch. 2 - Gumbo Company had the following transactions...Ch. 2 - Here are facts for Haileys Collision Service for...Ch. 2 - Prepare an income statement using the following...Ch. 2 - Prepare a statement of owners equity using the...Ch. 2 - Prepare a balance sheet using the following...Ch. 2 - The following information is taken from the...Ch. 2 - Each situation below relates to an independent...Ch. 2 - The following information is from a new business....Ch. 2 - Each of the following situations relates to a...Ch. 2 - For each of the following independent...Ch. 2 - Olivias Apple Orchard had the following...Ch. 2 - Using the information in PA6, determine the amount...Ch. 2 - The following ten transactions occurred during the...Ch. 2 - The following information is taken from the...Ch. 2 - Each situation below relates to an independent...Ch. 2 - The following information is from a new business....Ch. 2 - Each of the following situations relates to a...Ch. 2 - For each of the following independent...Ch. 2 - Mateos Maple Syrup had the following transactions...Ch. 2 - Using the information in PB6, determine the amount...Ch. 2 - Choose three stakeholders (or stakeholder groups)...Ch. 2 - Assume you purchased ten shares of Roku during the...Ch. 2 - A trademark is an intangible asset that has value...Ch. 2 - For each of the following ten independent...Ch. 2 - The following historical information is from...
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Principles of Accounting Volume 2
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Similar questions
- Net Working Capital is defined as the sum of current assets and current liabilities plus the firm's cash account balances. Select one: O True O Falsearrow_forwardA. Which of the following is most closely associated with the cost of using assets? a. Asset utilization b. Sales revenue c. Proportion of debt and equity d. Average price B. Which of the following is most closely associated with the return on management’s use of assets? a. Cost of capital b. Mix of equity types c. Prime lending rate d. # of products soldarrow_forwardThe ratio sales to working capital is a measure ofa. Collectability.b. Operational leverage.c. Liquidity.d. Financial Leveragearrow_forward
- Briefly explain the meaning of working capital and working capital management. Also explain the relationship of current asset policy with liquidity, profit and risk. Which policy do you think is good?arrow_forwardWhat refers to the way the company’s assets are financed and includes both long-term as well as short-term sources of funds Select one: a. Profit b. None of the option c. Capital structure d. Working Capital e. Capital Budgetingarrow_forwardWhich of the following formulas will correctly calculate Net Working Capital? A. Current assets + current liabilities B. Free cash flow + depreciation expenses C. Incremental earnings – capital purchases D. Current assets – current liabilitiesarrow_forward
- Working capital management is a financial decision-making process. a. True b. Falsearrow_forwardNet working capital is defined as:Select one:a. Fixed assets minus long-term liabilities.b. Current assets minus current liabilities.c. Total liabilities minus shareholders' equity.d. Current liabilities minus shareholders' equity.e. Total assets minus total liabilities.arrow_forwardWorking capital management refers toa) the management of cash flowsb) capital structurec) long-term financing decisionsd) investing in product developmentarrow_forward
- Deciding a firm's capital structure can be understood as: a. a capital budgeting decision b. a capital structure decision c. a primary market decision d. an asset efficiency decisionn\arrow_forwardNetworking capital refers to the A) firms investment in total assets B) firms' investment in current assets C) difference between the firm's current assets and its current liabilities D) Difference between the firms total assets and its total liabilitiesarrow_forwardThe primary objective of working capital management is to A. maximize the company's total current assets. B. minimize the company's total current liabilities C. achieve a balance between risk and return. D. balance the amount of current assets and current liabilities.arrow_forward
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