Chapter 9 Flashcards
What is the difference between a classified balance sheet and the ones we have seen so far in the semester?
It separates current assets from noncurrent (or long-term) assets and current liabilities (or long-term) liabilites.
What are some current assets?
- cash
- marketable securities
- a/r
- short-term notes payable
- interest receivable
- inventory
- supplies
- prepaid items (rent or insurance etc)
What are some noncurrent or long-term assets?
- property, plant and equipment ()
- long-term notes receivable
T or F: An easy way to remember what is noncurrent or long-term is generally what a company will use or owe within a year.
Yes.
Explain what a notes receivable is.
It is when a company essentially lending to a customer or bank.
How is current ratio calculated?
total current assets / total current liabilites
The current ratio essentially states that a company has a certain amount in current ______ for each dollar of _______ liabilities.
assets
current
List some current liabilities.
- accounts payable
- short-term notes payable
- salaries payable
- taxes payable
- interest payable
- unearned revenue
Long-term ______ _____________ are an example of a noncurrent liability.
notes payable
