As a Recent College Graduate with a Degree in Accounting

Multiple Choice

As a recent college graduate with a degree in accounting, Jeff is helping a newly formed construction company set up its accounting system. Although the company had purchased accounting software, Jeff wants to make certain that future reports will distinguish between current liabilities and long-term liabilities. In the future, he will need to know the amount of total current liabilities in order to ____________________.

A) know when it is time to make a long-term mortgage payment.
B) calculate if the company has purchased too much inventory for home building.
C) analyze whether the company can afford to make capital purchases such as additional land acquisition.
D) analyze whether the company has enough funds to pay the near-term bills.