Acc201 Chapter 10 Take away

Acc201 Chapter 10 Take away - Take away Define measure and...

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Take away a Define, measure, and report current liabilities. Strictly speaking, accountants define liabilities as probable future sacrifices of economic benefits that arise from past transactions. They are classified on the balance sheet as either current or long term. Current liabilities are short-term obligations that will be paid within the current operating cycle of the business or within one year of the balance sheet date, whichever is longer. Long-term liabilities are all obligations not classified as current. a Use the current ratio. The current ratio is a comparison of current assets and current liabilities. Analysts use this ratio to assess the liquidity of a company. a Analyze the accounts payable turnover ratio. This ratio is computed by dividing cost of goods sold by accounts payable. It shows how quickly management is paying its trade creditors and is considered to be a measure of liquidity. a
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Acc201 Chapter 10 Take away - Take away Define measure and...

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