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2 years ago

The sum of cash, current investments, and accounts receivable divided by current liabilities equals the?

1 answer:

8 0

The sum of cash, current investments, and accounts receivable divided by current liabilities equals the (C) acid-test ratio.

<h3>What is the acid-test ratio?</h3>

The quick ratio, also known as the acid-test ratio, is a type of liquidity ratio in finance that measures a company's ability to use its near cash or quick assets to immediately extinguish or retire its current liabilities.
It is defined as the proportion of readily available or liquid assets to current liabilities.
Quick assets are current assets that can presumably be converted to cash quickly at close to book value.
A normal liquid ratio is defined as 1:1.
A company with a quick ratio of less than one is currently unable to fully repay its current liabilities.
The acid-test ratio equals the sum of cash, current investments, and accounts receivable divided by current liabilities.

Therefore, the sum of cash, current investments, and accounts receivable divided by current liabilities equals the (C) acid-test ratio.

Know more about acid-test ratio here:

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The correct question is given below:
The sum of cash, current investments, and accounts receivable divided by current liabilities equals the?

(A) current ratio

(B) asset turnover ratio

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Dealer loader is correct

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3 years ago

Backflush costing is a costing method that: Charges current production costs directly to finished goods inventory. Charges curre

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Answer:

Charges current production cost directly to work-in-process inventory

Explanation:

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Therefore as per the given situation the second option is correct

ANd, the rest of the options are wrong as it does not meet the criteria

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2 years ago

Carmen Camry operates a consulting firm called Help Today, which began operations on August 1. On August 31, the company’s recor

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Answer:

Equity at August 1st 0

adds: Carmen Camry Investment 101,4000

Net Income 5,410

Subtotal 106,810

Withdrawals -5,950

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Explanation:

We have to calculae the net income

Fees earned 26,960

office 5,200

rent expense 9,500

salaries expense 5,560

telephone expense 820

miscellaneous expenses 470

Total Expenses 21,550

Net Income 5,410

Then we do the equity stamtent:

beginning + investment + net income - withdrawals = ending

Equity at August 1st 0

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Net Income 5,410

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3 years ago

Read 2 more answers

Souza Inc, which produces and sells a single product, has provided its contribution format income statement for October.

Dafna1 [17]

Answer:

d. $300

Explanation:

Calculation for what its net operating income should be closest to

Using this formula

First step is to calculate the contribution margin per unit using this formula

Contribution margin per unit= Contribution margin ÷ Number of units

Let plug in the formula

Contribution margin per unit= $48,000 ÷ 4,000 units

Contribution margin per unit= $12

Second step is to calculate the contribution margin

Contribution margin = 3,500 units × $12

Contribution margin = $42,000

Now let calculate the net operating income using this formula

Net operating income = Sales - Variable cost - Fixed expenses

Let plug in the formula

Net operating income= $42,000 - $41,700

Net operating income= $300

Therefore its net operating income should be closest to $300

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2 years ago

In working with a client named Fred, you realize that he did not report income that he should have on a return. Fred reported $1

Ksivusya [100]

Answer:

b) Fred must maintain records for 6 years from the year the return was filed

Explanation:

A person that prepares tax is required by the Internal Revenue Service to keep tax returns and supporting documents for at least 3 years.

However when the tax preparer fails to report correct income amount they are required to keep records for at least the last 6 years.

The underreported income must be greater than 25% of the income.

In the given scenario the Fred reported $10,000 instead of $13,500.

The unreported amount is $3,500

Percentage not reported = (3,500 ÷ 13,500) * 100 = 25.925%

So Fred will need to keep records for the next 6 years

8 0

2 years ago