Which statement is true?

Which statement is true?

a. The higher the company's cash to current liabilities ratio, the better is the company.
b. The higher the company's cash to current liabilities ratio, the better liquid is the company.
c. The current ratio is a superior tool in assessing short-term liquidity.
d. None of these.

Answer: B

Which statement is true:

Which statement is true:

a. When examining a company's current ratio it is important to also assess the quality of the current assets and liabilities.
b. If a company has a current ratio greater than one then there is no chance it will go bankrupt in the next year.
c. The current ratio is a superior tool in assessing short-term liquidity.
d. None of these

Answer: A

Which statement is true:

Which statement is true:

a. Liquidity is viewed as the company's ability to meet its short term and long term obligations.
b. Liquidity is generally measured by the company's ability to pay its short term obligations using its short assets.
c. The current ratio is a superior tool in assessing short-term liquidity.
d. If a company has a current ratio greater than one then there is no chance it will go bankrupt in the next year.

Answer: B

The dividends paid are part of which section:

The dividends paid are part of which section:

a. Investing activities
b. Financing activities
c. Operating activities
d. None of these

Answer: B

Which statement is true:

Which statement is true:

a. The issuance of stock might include the capital stock account and retained earnings.
b. The issuance of stock might include both the capital stock account and the additional paid-in capital account.
c. The issuance of stock might include the additional paid-in capital account and retained earnings.
d. The issuance of stock might include the capital stock account, the additional paid-in capital account and retained earnings.

Answer: B

Which statement is true:

Which statement is true: 

a. Amortization expense is treated as an increase in cash flow from investing activities.
b. Amortization expense is treated as an increase in cash flow from financing activities.
c. Amortization expense is treated as an increase in cash flow from operating activities.
d. None of these

Answer: C