Other

Question 1

Current ratio

Answer 1

Current assets / current liabilities

Question 2

Quick ratio

Answer 2

(Current assets - inventory) / current liabilities

Question 3

Bad debt expense (allowance method)

Answer 3

Required balance - current balance in allowance

Question 4

Record bad debt expense

Answer 4

Debit => uncollectible accounts expense Credit => allowance uncollectible accounts

Question 5

Direct write off method

Answer 5

Wait until account has become uncollectible before recording expense

Question 6

Income statement (measures performance)

Answer 6

Net income = revenues - expenses

Question 7

Statement of retained earnings (change)

Answer 7

Beginning retainer earning +/- net income/loss - dividends

Question 8

Balance sheet

Answer 8

Asserts = liabilities + equity

Question 9

Cash flow statement (how much cash spent/generated

Answer 9

Cash flows => operating/ investing / financing activities

Question 10

ADE
LER

Answer 10

Assets Dividends Expenses
Liabilities Equity Revenue

Question 11

Equity

Answer 11

Retained earnings and Share Capital -ordinary

Question 12

Retained earning

Answer 12

Net income (revenues - expenses) - dividends