Question

Listed below are 5 terms followed by a list of phrases that describe or characterize the terms. Match each phrase with the correct term.

Phrase:

1. Presented fairly in conformity with GAAP.

2. The larger the better from a debt holder's perspective.

3. Expenses incurred but not yet paid.

4. Supported by a negotiable instrument.

5. Will be satisfied in the next year or the operating cycle, whichever is longer.

Terms:

Accrued liabilities

Times interest earned ratio

Unqualified opinion

Notes receivable

Current liabilities

Answer 1

the following table shows the match the following:

1	Presented fairly in confirmity with GAAP	Unqualified opinion
2	The larger the better from debt holder's perspective	Times interest earned ratio
3	Expenses incurred but not yet paid	Accrued liabilities
4	supported by a negotiable instrument	Notes receivable
5	Will be satisfied in the next year or the operating cycle, which ever is longer	Current liabilities

1.when financial statements are presented fairly as per GAAP, the auditor will express an unqualified opinion.

2.times interest earned ratio measures the interest repayment capacity of the entity and the greater its value, the better it is for its debtors.

3.expenses incurred but not yet paid are called as accrued liabilities.

4.Notes receivable is a negotiable instrument.

5.current liablities are those which are satisfied in a year or in the next operating cycle which ever is longer.