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Answer To Accounting Question IFS Test No 4 On Interpretation of Financial Statements

November 10th, 2006 / No comments yet

Answer to Accounting Test Question IFS No 4:

Current ratio

Acid-test ratio

Debt to equity ratio

1

Company issued ordinary shares for cash

I

I

D

2

Bought raw material on account

I

D

I

3

Received money from accounts receivable

N

N

N

4

Expiration of prepaid rent

D

N

I

5

Payment of cash dividend

D

D

I

6

Purchase long term investment with cash

D

D

N

7

Sale of fixed assets for cash with no gain or loss

I

I

N

8

Stock write off

D

N

I

9

Refinance on a long term basis currently matured debt

I

I

N

10

Bought fixed asset with a 6 month note

D

D

I

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