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Finance/Accounting : Accounts Receivable, Debt and Check Kiting

A cash payment received from a customer's accounts receivable would be recorded as:
a) an increase in revenue
b) a decrease in liability
c) an increase in owner's equity
d) an increase in assets

16. Which of the following statements is false?
a) A company generally prefers to have a high debt ratio.
b) The current ratio measures the ability to pay current liabilities with current assets.
c) The debt ratio measures a business's ability to pay long-term liabilities with long-term assets.
d) A company generally prefers to have a high current ratio.

17. Payers attempt to create delays in the check clearing process. Recipients attempt to remove delays in the check clearing process. Performed legally, this is referred to as check kiting.
a) true
b) false

Solution Preview

A cash payment received from a customer's accounts receivable would be recorded as:

d) an increase in assets
(Increase in cash and ...

Solution Summary

Accounts Receivable, Debt and Check Kiting are investigated.

$2.19