When a company accrues salaries at the end of the accounting period: Multiple Choice A. Its...
When a company accrues salaries at the end of the accounting period:
Multiple Choice
A. Its acid-test ratio increases.
B. Its current ratio increases.
C. Its debt to equity ratio decreases.
D. Its debt to equity ratio increases.
Homework Answers
Answer: D. Its debt to equity ratio increases.
Explanation:
Accrued salaries mean the amount of liability (under head current liability) remaining at the end of a reporting period's salaries. Its current liability increases.
So, Its acid-test ratio will be decreased and the current ratio also decreases.
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When a company accrues salaries at the end of the accounting
period:
Multiple Choice
A. Its...
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