Question1 The______ratio measures the extent to which a firm is able to cover its short-term obligations...

Question1

The______ratio measures the extent to which a firm is able to cover its short-term obligations (usually due within the next year) with its short-term assets

a. ROE

b. Dept to assets ratio

c. Expense ratio

d. Quick ratio

e. Current Ratio

Question2. Which of the following statements regarding the balance sheer is NOT correct?

a. The balance sheet reports stockholders' equity on the right side

b. The balance sheet provides a snapshot of the firm's financial position at a given point in time

c. The balance sheet reports liabilities on the left side

d. The balance sheet lists the firm's assets, liabilities, and equity.

Solutions

Expert Solution

Question1

The______ratio measures the extent to which a firm is able to cover its short-term obligations (usually due within the next year) with its short-term assets

Correct Answer is "Current Ratio", Since current ratio compares the current assets with current liability and current ratio shows that how many time the current assets are in comparision to current liabilities.

Question2.

Which of the following statements regarding the balance sheer is NOT correct?

a. The balance sheet reports stockholders' equity on the right side (Correct)

b. The balance sheet provides a snapshot of the firm's financial position at a given point in time (Correct)

c. The balance sheet reports liabilities on the left side (Incorrect)

d. The balance sheet lists the firm's assets, liabilities, and equity. (Correct)

Here, option (c) is not correct since assets comes on the left side of the Balance Sheet and capital and liabilities on the right side.

jeff jeffy answered 1 year ago

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