Ch. 9 - Current Liabilities, Contingencies, and the Time Value of Money Flashcards
1
Q
The balance sheet generally presents two categories of liabilities. Which?
A
Current and long-term liabilities
2
Q
What is a current liability?
A
An obligation that will be satisfied within one year.
3
Q
What is the current ratio? What does it say?
A
The ratio is current assets to current liabilities. It helps determine a company’s liquidity.
4
Q
What are accounts payable?
A
The amounts owed for the purchase of inventory, goods, or services acquired in the normal course of business.
5
Q
When does Current Maturities of Long-Term Debt appear on a balance sheet?
A
When a firm has a long-term liability and must make periodic payments.
