Fran and Bob (Who Are Married) Own and Manage a Cleaning

question 34

Multiple Choice

Fran and Bob (who are married) own and manage a cleaning service. A potential advantage of this arrangement is that

• A) differences of opinion about the business likely won't carry over into family lives since they will see each other more hours daily.
• B) it affords the opportunity to share more of their lives together.
• C) the business isn't likely to dissipate their energies as they can each work on separate sections.
• D) they can count on working fewer hours in the business.

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Definitions:

Current Liabilities

Obligations that a company expects to pay within one year or within its normal operating cycle, whichever is longer, including accounts payable, short-term loans, and other accrued liabilities.

Current Ratio

A financial metric indicating a firm's capacity to settle short-term debts, determined by dividing current assets by current liabilities.

Conceptual Framework

An underlying structure in accounting that outlines the objectives and fundamentals leading to consistent standards and financial reporting.