When the Proceeds of General Long-Term Debt Are Received by a Governmental

question 15

True/False

When the proceeds of general long-term debt are received by a governmental fund, the debit to cash is offset by an other financing source on the fund statement.

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Definitions:

Acid-Test Ratio

A financial metric used to determine a company's short-term liquidity situation by comparing its most liquid assets, excluding inventory, to its current liabilities.

Current Assets

Short-term assets that are expected to be converted into cash, sold, or consumed within one year or within the business's operating cycle, including cash, inventory, and receivables.

Inventory

The total amount of goods and materials held in stock by a business or organization.

Marketable Securities

Financial instruments that can be easily bought or sold on public exchanges or markets with high liquidity and short maturity periods.