Which is most important to evaluate when considering extending credit to a small business and why? O The increase in the liabilities over the last two years because this may indicate there are unpaid bills. O The rate of revenue growth because this demonstrates that the management of the business is effective. O The relationship of current assets to current liabilities which represents a company's ability to meet short-term debt obligations when due. The balance in the company's cash account because this represents the wealth of the business.

Which is most important to evaluate when considering extending credit to a small business and why? O The increase in the liabilities over the last two years because this may indicate there are unpaid bills. O The rate of revenue growth because this demonstrates that the management of the business is effective. O The relationship of current assets to current liabilities which represents a company's ability to meet short-term debt obligations when due. The balance in the company's cash account because this represents the wealth of the business.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 13MC: What information can best be elicited from a receivable ratio? A. company performance with current...

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What information can best be elicited from a receivable ratio? A. company performance with current debt collection B. credit extension effect on cash sales C. likelihood of future customer bankruptcy filings D. an increase in future credit sales to current customers
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