Question: 1. Why would a company need to record a probable liability, but not a probable gain? 2. Companies can use working capital, current ratio and

1. Why would a company need to record a probable liability, but not a probable gain?

2. Companies can use working capital, current ratio and acid-test ratio to evaluate liquidity. This analysis is much more beneficial if compared to a company in a similar industry. What is a benchmark? If you have a fictional company, tell me a benchmark company that you would use to evaluate your liquidity.

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