F4 - Working Capital Flashcards
1
Q
Factoring receivables without recourse is a
A
Sales transaction. Factoring without recourse transfers the risk of uncollectible accounts to the buyer.
2
Q
Which method of recording uncollectible accounts expense is consistent with accrual accounting?
A
Allowance Method
3
Q
Adjusted cash balance =
A
Unadjusted cash balance +/- bank errors + credit memos - service charges.
4
Q
Current Ratio =
A
Current Assets/Current Liabilities!
5
Q
Quick Ratio =
A
(Cash + Net receivables + Marketable Securities) / Current Liabilities
