Balance Sheet Flashcards
1
Q
Which financial statement would an analyst primarily use to assess the entity’s liquidity?
A
The balance sheet, by calculating the liquidity ratios.
2
Q
Current ratio
A
current assets / current liabilities
3
Q
Quick ratio
A
(cash + accounts receivable + short term or marketable securities) / current liabilities
4
Q
Cash ratio
A
(cash + short-term or marketable securities) / current liabilities
5
Q
What are the accounting cycle steps?
A
Journal, ledger, trial balance, and financial statements
6
Q
What are the required classifications under IFRS?
A
Under IFRS, the classified statement of financial position has just two classifications: Current and non-current. Both assets and liabilities are divided into these two classifications, with non-current being the default category.
