Solvency is the ability to meet long-term obligations and generate future revenues.

Asked by lisku

The ability to generate future revenues and meet long-term obligations is referred to as:

A) Liquidity and efficiency

B) Solvency

C) Profitability

D) Market prospect

Ratio analysis is more effective when ratios:

A) Are compared to each other over time

B) Are tied to investors market analysis

C) Are reviewed at the end of each month

D) Are reviewed at the end of each quarter

When communicating financial data to management:

A) Explain each number on the income statement and balance sheet in detail, the statement of cash flow stands on its own

B) Use various websites such as Wikipedia to explain what the financial information means in order to write 5-10page report to support the financial statement presented

C) Review your calculations for accuracy before you present the data

D) Explain the data in detail, using as much detail and supporting documentation to explain your numbers

According to generally accepted accounting principles, a full set of financial statements

A) Include footnotes but only disclosing earnings per share and depreciation methods

B) Must include footnote disclosures communicating to the reader how all numbers were computed

C)Never includes footnotes; the financial statement stands on their own

D) Include footnotes disclosures subject to cost benefit

The All Quality Cookie Company has been experiencing a decline in income over the past several years due to the increase in the price of sugar and flour. Top management has decided to adjust the packaging size in an effort to cut costs rather than fire a number of employees. Is this decision legal and ethical?

A) The decision is both legal and ethical

B) The decision is legal but not ethical

C)The decision is neither legal nor ethical

D)The decision is not legal but is ethical

The Led Zep Accounting Firm has two branches - one in NYC and the other in LA. Both service each other's clients and the clients of their clients. A junior partner in the LA office learns in confidence from client ZZ-Todd that a client of the NYC office, Eddie Mercury Inc., is not recording all of the information on their financial statements. Who is responsible for the accuracy of the financial statements?

A) The management of Eddie mercury, Inc

B) The partner at Led Zep accounting firm- NYC since Eddie mercury inc is one of their clients in NYC

C)The partner at Led Zep accounting firm LA since they heard about the issue from one of their clients

D)The client ZZ-Todd since they heard about the issue first