Current Assets and Liabilities Flashcards
1
Q
What is a current asset?
A
Cash other assets sold or converted to cash during the current operating cycle - Demand deposits - cash equivalents - accounts receivable - inventory - pre-paids - short-term investments
2
Q
What is a current liability?
A
paid within 12 months or less
3
Q
How is the Quick Ratio calculated?
A
Current Liabilities
4
Q
How is the Current Ratio calculated?
A
Current Liabilities
5
Q
How is Working Capital calculated?
A
Currents Assets - Current Liabilities
6
Q
How is A/R Turnover calculated?
A
Average A/R
7
Q
How is Inventory Turnover calculated?
A
Average Inventory
8
Q
How is Day Sales in Inventory calculated?
A
Inventory Turnover
9
Q
How is Days to Collect A/R calculated?
A
Average Sales per Day
10
Q
How are gain contingencies recorded?
A
NOT accrued = Conservatism
11
Q
When are loss contingencies recorded?
A
Probable - accrued (if estimable) and disclose
Reasonably Possible - disclosed
Remote - don’t accrue or disclose
