Question

QUESTION 3: Insolvency is immediately apparent by observing the ____________ ratio.

		debt ratio (debt to assets)
		inventory turnover
		total asset turnover
		current

QUESTION 4: The balance sheet describes what aspect about the firm?

		solvency
		market impact
		performance
		continuity

QUESTION 5: Making changes to accounts just before the end of an accounting period, in order to make the firm look stronger than it actually is, is called

		ratcheting
		float constructing
		spray painting
		window dressing

Answer 1

Q.3 Insolvency is immediately apparent by observing Debt Ratio because as debt value surpass the asset ratio, it means company is not in position to pay of debts and can be declared insolvent anytime.

Q.4 The balance sheet of a firm mainly describe it's solvency. It shows the assets and liabilities of the firm which clearly shows whether the firm will be able to pay off its debts from existing assets or not.

Q.5 Window Dressing, means showing infalted profits and results to show stronger position of business.

answered by: anonymous