Chapter 8. Current Liabilities

Issuing a note payable for cash results in a(n) _____.

Increase in assets and increase in liabilities

The mathematical formula for working capital is current assets __________ current liabilities. Click the answer you think is right. plus multiplied by minus divided by

Minus

The acid-test ratio is based on a more conservative measure than the current ratio of the company's ability to: Click the answer you think is right. stay profitable pay its current liabilities earn a high return turn over its assets

pay its current liabilities

Which of the following are items included in the numerator of the quick ratio? Cash Inventory Account receivable Current investments

Cash Account receivable Current investments

A contingent liability is an existing ______ situation that might result in a loss depending on the outcome of a(n) ______ event.

uncertain future

Deferred revenues and sales tax payable typically are reported as ______________ liabilities.

Current

__________ refers to a company's cash position and overall ability to obtain cash in the normal course of business. (Enter one word per blank)

Liquidity

On November 1, 2018, ABC Corp. borrowed $100,000 cash on a 1-year, 6% note payable that requires ABC to pay both principal and interest on October 31, 2019. The journal entry on November 1, 2018 would include which of the following? Check that apply. Debit to Interest Expense $6,000 Debit to Cash $100,000 Credit to Note Payable $106,000 Credit to Note Payable $100,000

Debit to Cash $100,000 Credit to Note Payable $100,000

Which of the following payroll-related taxes must the employer pay by law? Check all that apply. Contributions toward retirement funds, Unemployment taxes, Federal Insurance Contributions Act amounts, Union dues

Unemployment taxes Federal Insurance Contributions Act amounts