Exam 10: Reporting and Interpreting Bond Securities

The trade payables turnover ratio tests how quickly our credit customers pay their bills.

G Co, a biotechnology company, reported current assets of $1,326.5 million and current liabilities of $484.1 million in 2013 and in 2012, current assets of $1,242.0 million and $291.3 million of current liabilities. Therefore, working capital for G Co. increased from 2012 to 2013.

Time value of money is based on the concept that money received today is worth more than money to be received a year from today.

The "trade payables" account should generally be used only for trade payables (obligations owed to suppliers in the normal course of business) which relate to the purchase of goods and services.

Simple interest is calculated as: Principal x Time.

The following is a partial list of account balances from the books of Ellsworth Enterprise at the end of 20B: Based solely upon these balances, what amount of current liabilities should appear on Ellsworth's 20B year-end statement of financial position? A) $5,400 B) $4,800 C) $4,300 D) $3,900

Notes payable are sometimes used instead of trade payables.

Most companies pay current liabilities

The journal entry required on the company's books to record the note payable on July 1, 20A would include which of the following?

The relationship between current assets and current liabilities is

Property tax payable is classified as a long-term liability because it is related to property, a noncurrent asset.

On September 1, Hauser Corp. borrowed $70,000 from the Metro Bank for five months at 9%. Interest is payable at maturity. The entry Hauser must make on December 31, its year-end, assuming no prior accruals is:

Which of the following is not a typical current liability?

Income tax expense reported on the income statement is $45,000 for 20A, and the tax return for 20A (the first year) shows an income tax liability of $42,000 because of a deduction that cannot be taken until 20B. The future income tax amount on the statement of financial position at the end of 20A will be which of the following?

The quick ratio is the dollar difference between total assets and total liabilities.

On the company's 20A year-end statement of financial position, the liability related to this note should be reported as which of the following?

Which of the following most likely would be classified as a current liability?

If a company's fiscal year is the same as the year used for property tax purposes, there should be no prepaid property tax on its year-end financial statements but there may be a property tax liability.

Analysts use the quick ratio to assess the profitability of a company.

The balance in the Future Income Tax Asset account always will reverse or "turn around" over a period of one or more future periods if no new differences originate.