#1
Which of the following is considered a current liability?
Long-term loan
Accounts payable
Property, plant, and equipment
Common stock
#2
What is the primary purpose of a note payable?
To finance long-term investments
To record short-term loans
To purchase inventory
To pay dividends to shareholders
#3
When are current liabilities usually due?
Within one year
Within six months
Within three years
More than five years
#4
Which financial statement includes current liabilities?
Income statement
Statement of cash flows
Balance sheet
Statement of retained earnings
#5
Which of the following is NOT typically considered a current liability?
Accounts payable
Wages payable
Notes payable due in two years
Accrued expenses
#6
How does a company classify short-term borrowings in its financial statements?
As long-term liabilities
As equity
As current liabilities
As revenue
#7
What is the formula to calculate the current ratio?
Current Assets / Total Assets
Total Assets / Current Liabilities
Current Liabilities / Total Assets
Current Assets / Current Liabilities
#8
Which of the following is a type of current liability that represents taxes owed but not yet paid?
Accounts payable
Notes payable
Accrued liabilities
Deferred revenue
#9
Which of the following is NOT a typical example of a current liability?
Accounts receivable
Wages payable
Notes payable
Accrued expenses
#10
Which of the following is considered a contingent liability?
Accounts payable
Notes payable
Warranty liability
Salaries payable
#11
Which financial ratio is calculated using current liabilities?
Return on Assets (ROA)
Current Ratio
Debt to Equity Ratio
Earnings Per Share (EPS)
#12
What happens to the current ratio if current liabilities increase?
Increases
Decreases
Remains unchanged
Cannot be determined
#13
What is the effect on working capital if a company pays off a current liability?
Increases
Decreases
Remains unchanged
Cannot be determined
#14
What does a high current ratio indicate about a company's liquidity?
Higher liquidity
Lower liquidity
No effect on liquidity
Cannot be determined
#15
What is the effect on the current ratio if current assets decrease?
Increases
Decreases
Remains unchanged
Cannot be determined
#16
How do you calculate the quick ratio?
(Current Assets - Inventory) / Current Liabilities
Current Assets / Current Liabilities
(Current Assets + Inventory) / Current Liabilities
Total Assets / Total Liabilities