Capital Assets

Capital Assets (tangible and Intangible) Tangible:  1. Property Plant & Equip 2.Natural Resources Cost Principle: What is included in the cost? See 2.5.1 – 2.5.4 What is Amortization? Based on: Cost,Useful Life,Residual Value 1.Straight Line 2.Declining Balance 3. Unit of activity

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Accounting for Receivables – Using the Information on the Financial Statements

Evaluation of Short-term Liquidity Collection of trade receivables has a significant impact upon a company’s cash position. Four ratios assist in evaluating short-term liquidity: 1.The current ratio (Current assets ÷ Current liabilities) measures a company’s ability to satisfy its short-term debts. 2.The acid test ratio or quick ratio measures a company’s ability to satisfy its short- term debts immediately. (Cash […]

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