Very Often, Failure to Record a Liability Means Failure to Record

question 128

Multiple Choice

Very often, failure to record a liability means failure to record a(n)

• A)revenue.
• B)asset.
• C)note.
• D)expense.

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Definitions:

Working Capital

The difference between a company's current assets and current liabilities, indicating the liquidity and operational efficiency of the business.

Total Assets

The sum of all current and long-term assets owned by a company, as represented on its balance sheet, indicating the resources it has at its disposal.

Inventory Turnover Ratio

Cost of goods sold as a multiple of average inventory.

Financial Statements

Documents that provide an overview of a company's financial condition, including balance sheet, income statement, and cash flow statement.