True or false? a. Companies with negative net working capital are usually in financial trouble. b. Principal

Question:

True or false?

a. Companies with negative net working capital are usually in financial trouble.

b. Principal payments on long-term debt are shown as current liabilities if due within the next 12 months.

c. Accounts payable are usually a small fraction of the firm’s total liabilities.

d. Accounts receivable are usually the largest category of current assets.

e. Less profitable companies typically hold larger cash balances as a precautionary measure.

f. Well-managed companies invest the majority of their excess cash in short-term securities. They avoid the risks of investing in long-term bonds.

Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive... Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...

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