Non-Current Assets examples are like land are often revalued over a period of time in the Balance Sheet of the Company. Current assets are used to calculate the current ratio of a business. The acid-test ratio is also known as the: A. current assets include cash and other assets that are reasonably expected to be converted to cash or consumed within the coming year, or within the normal operating cycle of the business… The following information relates to Maze Corporation. The following information relates to Smith Corporation. Tangible Non-Current Assets are usually valued at Cost Less Depreciation. In the aggressive approach to current asset financing: c. all of the fixed assets of a firm are financed with long-term capital, but some of the firm's permanent current assets are financed with short-term nonspontaneous sources of funds. alliekmoore. In simple terms, assets are properties or rights owned by the business. (This assumes that the company has an operating cycle of less than one year.) STUDY. Cash and cash equivalents 2. Assets refer to resources owned and controlled by the entity as a result of past transactions and events, from which future economic benefits are expected to flow to the entity. PP&E is impacted by Capex, Depreciation, and Acquisitions/Disposit… D) An increase in current liabilities increases working capital a) A and C b) A and D c) B … With a revolving (guaranteed) credit agreement, banks generally: c. charge a commitment fee on the unused balance of the credit line. The self-liquidating approach of current assets financing is also known as the: Which of the following approaches minimizes the risk that a firm will be unable to pay off its maturing obligations if the liquidations of the assets can be controlled to occur on or before the maturities of the obligations? Non-current assets have a useful life of longer than one year. Total Assets may include all current and non-current assets on the company’s balance sheet, or may only include certain assets such as Property, Plant & Equipment (PP&E)PP&E (Property, Plant and Equipment)PP&E (Property, Plant, and Equipment) is one of the core non-current assets found on the balance sheet. longer than one year. Fixed assets. Liquidity ratios are financial ratios that measure a company’s ability to repay both short- and long-term obligations. b. Fixed assets like property (e.g. You will be asked 5 questions of 20 marks each. ... OTHER QUIZLET SETS. Which of the following statements is true about the effective annual rate (EAR) and the annual percentage rate (APR)? A compensating balance that is maintained by a firm in a bank: Which of the following statements is true about general and revolving lines of credit? In theory, they are liquid but practically current assets are not as easily convertible to cash as compared to liquid assets. include cash and other assets that are reasonably expected to be converted to cash or consumed within the coming year, or within the normal operating cycle of the business, whichever is longer, cash on hand and in banks that is available for use in the operations of the business and such items as bank drafts, cashier's checks, and money orders, liquid investments not classified as cash equivalents; also called temporary investments or short-term marketable securities; investments in stock and debt securities are included if the company has the ability and intent to sell those securities within the next twelve months or operating cycle, whichever is longer, result from the sale of goods or services on credit (trade receivables), consist of assets that a retail or wholesale company acquires for resale or goods that manufacturers produce for sale (finished goods); inventory of a manufacturer will include goods in the course of production (work in process) and goods to be consumed directly or indirectly in production (raw materials), represents an asset recorded when an expense is paid in advance, creating benefits beyond the current period, result from loans or advances by the company to individuals and other entities, when receivables are supported by a formal agreement or note that specifies payment terms, certain negotiable items such as commercial paper, money market funds, and U.S. treasury bills; highly liquid investments that can be quickly converted to cash; maturity of three (3) months or less from the date of purchase. Assuming there are 360 days in a year, the company's inventory conversion period is: The following information relates to MARS Corporation. The cost of using the funds for 10 days is: Blackwell Corporation purchases its raw materials on credit terms of 2.5/20, net 40. Assuming that June currently holds no funds at the bank and the loan requires a 15% compensating balance to be maintained with the bank, June will have to borrow: Leh Inc. recently borrowed $275,000 from its bank at a simple interest rate of 9 percent. Which of the following is also referred to as days sales outstanding (DSO)? Current assets - also known as liquid assets - are either cash or items which a business expects to sell by the end of the financial year. The loan is for eight months and, according to the loan agreement, the interest should be added to the amount borrowed and the total amount will be repaid in monthly installments. Assets which physically exist i.e. B) An increase in current assets decreases working capital. Debt to equity ratio. Based on the following information, the cash conversion cycle is: The following information relates to Zync Corporation. Company A reported beginning total assets of $199,500 and ending total assets of $199,203. Examples of current assets include: cash, short-term investments, receivables, inventories and prepaid expenses. 3. Current assets are assets that are expected to be converted to cash within a year. b. The following information relates to Triblaze Corporation. A bank makes a formal commitment to honor a revolving line of credit, but there is no such commitment for a general line of credit. Accounts receivableAccounts ReceivableAccounts Receivable (AR) represents the credit sales of a business, which are not yet fully paid by its customers, a current asset on the balance sheet. 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