1. Which of the following accounts are used in computations of working capital?
a. Retained Earnings
b. Sales
c. Merchandise Inventory
d. Common Stock
2. A current ratio of 6 is generally an indication that firm
a. Has a low degree of liquidity.
b. Has a reasonable degree of liquidity.
c. Has made the most productive use of its assets.
d. Has not made good use of its assets
3. In advertiser's records, a newspaper ad submitted and published this week with agreement to pay for it next week would:
a. Decrease assets and decrease expenses
b. Increase liabilities and increase expenses
c. Decrease assets and increase revenue
d. Increase assets and decrease liabilities
4. Accounting concept/principle being applied when adjustment is made is generally matching revenue and expense:
a. True
b. False