Match the terms below with the correct definitions.
-The firm's excess of its current assets over its current liabilities
A)Property and equipment
B)Reversing entries
C)Gross profit
D)Current ratio
E)Working capital
F)Net income or net loss
G)Net sales
H)Income from operations
I)Long-term liabilities
J)Liquidity

Question

Quizplus · Accepted Answer

Working capital is the firm's excess of its current assets over its current liabilities.

Answer: A
 Property and equipment refers to the fixed assets that a company uses in its operations.

Answer: B
 Reversing entries are journal entries made at the beginning of an accounting period to reverse adjusting entries made in the previous period.

Answer: C
 Gross profit is the difference between net sales and the cost of goods sold.

Answer: D
 Current ratio is a financial ratio that measures a company's ability to pay its short-term obligations with its current assets.

Answer: F
 Net income or net loss is the company's total profits or losses after all expenses and taxes have been paid.

Answer: G
 Net sales is the total revenue generated by a company from the sale of goods or services, minus any returns or discounts.

Answer: H
 Income from operations is a company's profits from its primary business activities, before any interest or non-operating expenses.

Answer: I
 Long-term liabilities are debts or obligations that are due in more than 12 months.

Answer: J
 Liquidity refers to a company's ability to meet its short-term obligations with its current assets.

Match the Terms Below with the Correct Definitions