A Financial Manager Who Needs to Find Out How Long

question 210

Multiple Choice

A financial manager who needs to find out how long it will take before their firm runs out of cash if no further cash comes in should consider the ________________.

• A) Current ratio.
• B) Quick ratio.
• C) Cash ratio.
• D) Net working capital to total assets ratio.
• E) Interval measure.

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Definitions:

Ledger

A comprehensive collection of accounts where financial transactions are recorded, categorized, and summarized; an essential part of the accounting system.

Accounting Information System

A system used by businesses to collect, store, manage, process, retrieve, and report financial data for the purpose of informed decision-making.

General Ledger

A complete record of all financial transactions over the life of a company, used to compile financial statements.

General Journal

A basic accounting ledger that records each financial transaction of a business in chronological order.