WSP Crash Course in Accounting Exam Questions and Answers 100% Solved
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Course
Wsp
Institution
Wsp
WSP Crash Course in Accounting Exam
Questions and Answers 100% Solved
Working Capital - Current Assets - Current Liabilities
Current Assets - Can be converted to cash withing a year; includes:
cash, marketable securities, accounts receivable, inventory, prepaid
expenses
Current Liabilities - ...
Current Liabilities - ✔✔Due within a year; includes: accounts payable,
accrued expenses, deferred revenue, short-term debt, and current portion
of long-term debt
Current Ratio - ✔✔Current Assets / Current Liabilities; a financial ratio that
measures working capital designed to provide a measure of a company's
liquidity
One - ✔✔Generally speaking, a current ratio greater than __________
implies a company is more liquid because it has liquid assets that can
presumably be converted into cash and will more than cover the upcoming
short-term liabilities
, Quick Ratio - ✔✔(Cash, Marketable Securities, and Accounts Receivable) /
Current Liabilities; a financial ratio that isolates only the most liquid assets
(cash and receivables) to gauge liquidity
Liquidity - ✔✔The Balance Sheet organizes assets and liabilities in order of
__________
Operating Cycle - ✔✔Inventory Days + Days Sales Outstanding; the time it
takes, from start to finish, to buy/produce inventory, sell it, and collect cash
for it
Net Operating (Cash Conversion) Cycle - ✔✔Operating Cycle - Payables
Payment Period (PPP); an iteration of the Operating Cycle that takes into
account credit purchases
Receivables Turnover - ✔✔Revenue During Period / Average Accounts
Receivable
Days Sales Outstanding (DSO) - ✔✔Days in Period / Receivables Turnover
Inventory Turnover - ✔✔COGS / Average inventory
Inventory Days - ✔✔Days in Period / Inventory Turnover
Accounts Payable Turnover - ✔✔COGS / Average Accounts Payable
Payables Payment Period (PPP) - ✔✔Days in Period / Average Payable
Turnover
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