Chapter 9 Questions(1)

# Chapter 9 Questions(1) - 1 Assume the current ratio is 3 to...

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a. increase b. decrease c. be unchanged since the effects offset one another d. be unchanged since it has no effect on any current accounts 1. Assume the current ratio is 3 to 1. Estimating the warranties expense on the period’s sales would cause the current ratio to
B.  decrease

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2.    The  landlord  records  the  security  deposit  she  collects from the tenant as a(n) a. asset b. liability c. contingent liability d. contra liability
B . liability

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3. If a company purchases \$3,000 worth of inventory  with terms of 1/15, n30 and pays within 15 days, then  the amount paid to the seller would be a. \$2,550 b. \$2,970 c. \$3,000 d. \$3,030
B.  \$2,970

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4.    An  example  of  a  current  liability  that  must  be  accrued is a. accounts payable b. current maturity of long-term debt c. revenue received in advance. d. income taxes payable.
D.  income taxes payable.

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5.  On  October  1,  Rachel  Company  borrowed  \$60,000  from  Center National Bank on a 1-year, 7% note. If the company's
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Chapter 9 Questions(1) - 1 Assume the current ratio is 3 to...

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