Suppose you are a manager who has signed a debt contract (covenant) requiring that the current ratio
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Suppose you are a manager who has signed a debt contract (covenant) requiring that the current ratio (current assets divided by current liabilities) be kept above 2:1. How might this affect the methods you choose to account for certain transactions? Provide several other examples of contracts between investors, creditors, and managers that might influ¬ ence the accounting methods chosen by managers.
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