6. A current asset is (Points : 1)

the last asset purchased by a business. an asset which is currently being used to produce a product or service. usually found as a separate classification in the income statement. expected to be converted to cash or used in the business within a relatively short period of time.

Question 7. 7. The periodicity assumption states (Points : 1)

the business will remain in operation for the foreseeable future. the life of a business can be divided into artificial time periods and that useful reports covering those periods can be prepared. every economic entity can be separately identified and accounted for. only those things that can be expressed in money are included in the accounting records.

Question 8. 8. Working capital is (Points : 1)

calculated by dividing current assets by current liabilities. used to evaluate a company's liquidity and short-term debt paying ability. used to evaluate a company's solvency and long-term debt paying ability. calculated by subtracting current assets from current liabilities.

Question 9. 9. The going concern assumption is inappropriate when (Points : 1)

the business is just starting up. liquidation appears likely. market values are higher than costs. the business is organized as a proprietorship.

Question 10.10. The ability of a business to pay obligations that are expected to become due within the next year or operating cycle is (Points : 1)

leverage. liquidity. profitability. wealth.