A Useful Measure of Solvency Is the

question 65

Multiple Choice

A useful measure of solvency is the

• A)current ratio.
• B)earnings per share.
• C)return on assets ratio.
• D)debt to assets ratio.

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Definitions:

Current Assets

Resources anticipated to be transformed into cash, disposed of, or utilized within a period of a year or over the duration of the company's operating cycle, depending on which timeframe extends further.

Long-term Investments

Investments in stocks, bonds, real estate, or other instruments that are not intended to be sold or liquidated within the next year.

Correcting Entry

An entry made in the accounting records to correct an error found in previously recorded transactions.

Accounts Payable

Liabilities owed by a business to its suppliers or vendors for goods or services received that have not yet been paid for.