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Name: Calculate the current ratio using the following information: Cash $7,0
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Description: Calculate the current ratio using the following information: Cash $7,000 Accounts receivable 1,100 Prepaid rent 900 Land 40,000 Equipment 4,000 Accumulated depreciation 800 Accounts payable 3,000 Salaries payable 900 Note payable - long term 9,000

Business

Accounting

Calculate the current ratio using the following information:

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter16: Accounting Periods And Methods

Section: Chapter Questions

Problem 8DQ

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Concept explainers

Financial Transaction Analysis

The transaction analysis is done with the help of the accounting equation. The basic accounting equation is alternatively known as the balance sheet equation is based on the double-entry system which says that for each transaction happening in a business, at least two accounts should be affected I.e. both the debit side and the credit side should be equal. The Accounting Equation is

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Calculate the current ratio using the following information:

Cash $7,000

Accounts receivable 1,100

Prepaid rent 900

Land 40,000

Equipment 4,000

Accumulated depreciation 800

Accounts payable 3,000

Salaries payable 900

Note payable - long term 9,000

Definition Definition Money that the business will be receiving from its clients who have utilized the credit provided to buy its goods and services. The credit period typically lasts for a short term, lasting from a few days, a few months, to a year.

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