(a)
Long-term liabilities
Long-term liabilities are obligations that the company needs to pay after at least one year or more. Long term liabilities are otherwise called as long-term debt. Examples of long-term liabilities are long-term bonds, long-term notes payable.
To state: The requirements for the financial statement presentation of long-term liabilities.
(b)
Liquidity ratios measure the short-term capacity of a company to pay its maturing obligations and to meet unanticipated requirements for cash. Liquidity ratios are
Solvency ratios
Solvency ratios measure the capacity of a company to sustain over a long period of time. Solvency ratios are debt to assets ratio, time interest earned ratio, and debt to equity ratio, and more.
To state: the ratios that may be computed to evaluate a company’s liquidity and solvency.
Want to see the full answer?
Check out a sample textbook solutionChapter 10 Solutions
Financial Accounting: Tools for Business Decision Making, 8th Edition
- Financial accounting questionarrow_forward7,000 units in a process that are 70% complete are referred to as a. 7,000 equivalent units of production. b. 2,100 equivalent units of production. c. 4,900 equivalent units of production. d. 2,100 inequivalent units of productionarrow_forwardGeneral Accounting Question please solvearrow_forward
- What is the degree of operating leverage on these financial accounting question?arrow_forwardGlobal office supply uses the retail method to estimate ending inventory in its monthly financial statements. The following information is available for the month ended July 31. Sales 600,000 (retail) Inventory, July 1 274,800 (cost) 546,000 (retail) Net purchases 369,600 (cost) 546,000 (retail) Goods available for sale 644,400 (cost) 942,000 (retail) Using the retail method: a.) determine the cost ratio that should be used in estimating the inventory at July 31. b.) estimate the cost of inventory at July 31. c) estimate the cost of goods sold for July.arrow_forwardQuick answer of this accounting questionsarrow_forward
- Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage LearningManagerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College PubFinancial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,