Question 19

Q: When a company issues long-term bonds (i.e., maturity greater than one year), which of the following is NOT true:

	A.	Owners' equity decreases
	B.	Total liabilities increase
	C.	The current ratio increases
	D.	Total assets increase

1 points

Question 20

Q: The allowance for doubtful accounts is:

	A.	A contra-asset.
	B.	A liability.
	C.	An expense.
	D.	A contra-revenue.

1 points

Question 21

Q: Just before the current quarter ends, a company's trial balance sheets current assets of $50,000 and current liabilities of $30,000. Before closing the books, management decides to use $10,000 cash to repay $10,000 of accounts payable that are due the next month. What is the company's current ratio BEFORE that transaction?

	A.	1.67
	B.	1.25
	C.	1.23
	D.	1.5