1. Equipment is an example of a: A.current liability. B.longminus−term liability. C.current asset. D.longminus−term asset. 2....
1. Equipment is an example of a:
A.current liability.
B.longminus−term
liability.
C.current asset.
D.longminus−term
asset.
2. What is liquidity?
A.Liquidity is a measure of the fragility of certain types of inventory.
B.Liquidity is gross profit minus operating expenses.
C.Liquidity is the ability to convert an asset to cash quickly.
D.Liquidity is a shipping term that applies to freight sent by boat.
3. Under the periodic inventory system, the amount of inventory is:
A.constantly updated.
B.only known when a physical count is taken.
C.adjusted after each purchase.
D.adjusted after each sale.
Homework Answers
1. Equipment is an example of : "D" : Longminus-term asset
Reason : Equipment is an investment which will benefit the company or in other words, will provide future economic benefits to the company for more than just 1 year and hence it is classified as a long-term asset.
2. Liquidity is : "C" : ability to convert asset into cash quickly.
Reason : Liquidity is defined as how fast the company can convert its assets into cash so that it can meet its current obligations. A highly liquid company has low risk of not meeting its debt obligations.
3. Answer : "B" :Only known when a physical count is taken
Reason : Under a periodic inventory system, the inventory accounts are updated at periodic intervals, usually at the year end when the physical count is done. The transactions in between physical counts are recorded in purchases a/c which are moved to Inventory when the physical count is done.
Add Answer to:
1. Equipment is an example of a:
A.current liability.
B.longminus−term
liability.
C.current asset.
D.longminus−term
asset.
2....
Equipment is an example of a: A.current liability. B.longminus−term liability. C.current asset. D.longminus−term asset. What is...
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