A company seeking a line of credit at a bank was turned down. Among other things, the bank started that the company's 2 to 1 current ratio was not adequate. Give reasons why a 2 to 1 current ratio migth not be adequate.

When a lender refuses to make a loan, although borrowers are willing to pay the stated interest rate or even a higher rate, the bank is said to engage in strategic holding out. collusive behavior. coercive bargaining. credit rationing.

The new bookkeeper forgot to record the payment of an accounts payable to a supplier. What impact does this have on the company’s books?     No effect     Cash is understated/the Income Statement is understated     Cash is overstated/the Income Statement is overstated     Cash is overstated/liabilities are understated     Cash is overstated/liabilities are overstated

A trial balance does not balance. The owner believes the following mistakes WOULD cause animbalance. Do you agree? (Answer TRUE or FALSE for each statement) A. The owner forgot to record a cash saleB. A credit sale was recorded as a debit to sales and a debit to trade receivablesC. When transferring the bank overdraft from the Cash T account it was entered on thedebit side of the trial balanceD. Rates expense of £500 was debited to rent expenses and credited to cashE. A payment to a supplier of £690 was entered to cash as £690 but to trade payables as£609