Question
Multiple Choice... thank you Question 11) Quick asset ratio is measured by Cash + Receivables / Current liabilities . Assume quick asset ratio is less
Multiple Choice... thank you
Question 11)
Quick asset ratio is measured by Cash + Receivables / Current liabilities.
Assume quick asset ratio is less than 100% (or 1:1) and that the cash balance remains positive at all times.
State the effect the following event occurring on the reporting date would have on this ratio.
EVENT: The purchase of a non-current asset funded entirely by a long-term interest-only loan
Would it: Increase, Decrease or have No Change?
Question 12)
Debt ratio is measured by Total liabilities / Total assets.
Assume the cash balance remains positive at all times.
State the effect the following event occurring on the reporting date would have on this ratio.
EVENT: The recognition of the annual amortisation charge
Would it: Increase, Decrease or have No Change?
Question 13)
NTAB (Net tangible asset backing) is measured by Net tangible assets / Weighted average number of shares on issue.
State the effect the following event occurring on the reporting date would have on this ratio.
EVENT: The recognition of the annual amortisation charge
Would it: Increase, Decrease or have No Change?
Question 14)
Impairment is recognised when an asset's:
A. recoverable amount exceeds its fair value.
B. cost exceeds its recoverable amount.
C. recoverable amount exceeds its carrying amount.
D. carrying amount exceeds its recoverable amount.
E. recoverable amount exceeds its cost.
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