Question

36. Using the income statement for the month of June, 2018 of Delgado Enterprises presented in Question 35, the entry to close the rent expense account includes a

Select one:

a. debit to Dividend for $1,000.

b. debit to Rent Expense for $1,000.

c. credit to Rent Expense for $1,000.

d. credit to Income Summary for $1,000.

37. Which of the following ratio is useful in assessing the liquidity (i.e., the ability of a company to pay its current liabilities using current assets) of a company?

Select one:

a. debt ratio

b. current ratio

c. inventory turnover rate

d. gross margin ratio

Answer 1

Question 36:

Entry to close the rent expense account:

Income Summary a/c                                 Dr

                To Rent Expense a/c

Correct Option: c) Credit to Rent Expense for $1,000

Question 37:

The ratio which assesses the liquidity of the company i.e., the ability of the company to pay its current liabilities with current assets is called Current Ratio.

Current Ratio = Current Assets / Current Liabilities

Correct Option: b) Current Ratio