Pre-SFAC No

question 38

Multiple Choice

Pre-SFAC No. 8, the three components of reliability are:

• A) Predictive value, feedback value, timeliness.
• B) Verifiability, neutrality, representational faithfulness.
• C) Verifiability, predictive value, feedback value.
• D) Relevance, comparability, materiality.

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Definitions:

Cash Equivalents

Short-term, highly liquid investments that are easily convertible to a known amount of cash and are subject to an insignificant risk of changes in value.

Quick Ratio

A measure of a company's ability to meet its short-term obligations using its most liquid assets.

Accounts Receivable

Accounts receivable represents the money owed to a company by its customers for goods or services that have been delivered but not yet paid for, essentially an extension of credit from the company to the customer.

Accounts Payable

The amount of money owed by a company to its suppliers or creditors for goods and services purchased on credit.