Question

Match the following:

1. Acid-test ratio

2. Current portion of long-term debt

3. Recording a contingent liability

4. Commercial paper

5. Deferred revenues

6. Line of credit

7. Accrual accounting

8. Interest expense

9. The riskiness of a business's obligations

10. Disclosure of a contingent liability

A Cash, short-term investments, and accounts receivable all divided by current liabilities.

B Loss is probable and amount is reasonably estimable.

C Gift cards

D Long-term debt maturing within one year.

E Informal agreement that permits a company to borrow up to a prearranged limit.

F Interest expense is recorded in the period interest is incurred rather than in the period interest is paid

G Loss is reasonably possible and amount is reasonably estimable

H Incurred on a notes payable

I obligations Unsecured notes sold in minimum denominations of $25,000 with maturities up to 270 days

J Classifying liabilities as either current or long-term helps investors and creditors assess this.

Answer 1

Matching Statement ;-

S No.	Particulars	Explanation
1	Acid test ratio	A. Cash, short-term investments, and accounts receivable all divided by current liabilities.
2	Current portion of long-term debt	D. Long-term debt maturing within one year.
3	Recording a contingent liability	B. Loss is probable and amount is reasonably estimable.
4	Commercial paper	I. obligations Unsecured notes sold in minimum denominations of $25,000 with maturities up to 270 days
5	Deferred revenues	C. Gift cards
6	Line of credit	E. Informal agreement that permits a company to borrow up to a prearranged limit.
7	Accrual accounting	F. Interest expense is recorded in the period interest is incurred rather than in the period interest is paid
8	Interest expense	H. Incurred on a notes payable
9	The riskiness of a business's obligations	J. Classifying liabilities as either current or long-term helps investors and creditors assess this.
10	Disclosure of a contingent liability	G. Loss is reasonably possible and amount is reasonably estimable