FAR-4

Card Set Information

Author:
Anonymous
ID:
132170
Filename:
FAR-4
Updated:
2012-02-01 03:16:53
Tags:
CPA
Folders:

Description:
CPA
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  1. What is the definition of working capital?
    Current assets - Current Liabilitites

    measure of solvency
  2. What is current ration and quick ratio?
    Current Ratio: C.A./C.L.

    Quick Ratio: (cash+cash equiv.+mrktbl securities)/C.L.
  3. What are current assets?
    resources that are reasonable expected to be realized in cash, sold/consumed during normal operating cycle of a busines or one year (whichever is longer)

    ex: cash, trading securities, N/R, other short term investments; prepaid expense,

    *cash surrender value: life insurance can be C.A. or non C.A
  4. What are Current Liabilities?
    • "Is it due within the next year?"
    • sources: may arise from regular business operations (A/P;W/P) or to meet cahs needs through bank borrowings
  5. Can short term obligation that are

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