Chapter 13

Question 1

CURRENT RATIO

HINT: “What do you prefer: assets or liabilities?”

“I prefer assets over liabilities, because owning things makes me richer, while owing others makes me poorer!”

Answer 1

HINT:

Current Ratio = Current Assets “over” Current Liabilities

RULE:

Current Ratio = Current Assets / Current Liabilities

Question 2

EMPLOYEE-RELATED LIABILITIES: MAIN TYPES

HINT: Companies Pay Bonuses to keep their employees happy!

Answer 2

HINT:

Companies Pay Bonuses to keep their employees happy!

• Compensated absences
• Payroll deductions
• Bonuses