A company’s current rat Study guides, Class notes & Summaries

ADVANCED FINANCIAL ACCOUNTING & REPORTING - THEORIES BUSINESS COMBINATION - PFRS 3 1. It is a transaction or other event in which an acquirer obtains control of one or more businesses. a. Business c ombination b. Merger c. Consolidation d. Intercorporate directorship 2. This is defined as an integrated set of activities and assets that is capable of being conducted and managed for the purpose of providing a return directly to investors or other owners, members or participants. a. Business b. Tra...

UNDERSTANDING AND ANALYSIS AND INTERPRETATION OF FINANCIAL STATEMENTS 1. A company’s current ratio is 2.2 to 1 and quick (acid test) ratio is 1.0 to 1 at the beginning of the year. At the end of the year, the company has a current ratio of 2.5 to 1 and quick ratio of .8 to 1. Which of the following could help explain the divergence in the ratios from the beginning to the end of the year? a. An increase in inventory levels during the current year. b. An increase in credit sales in relation...