CFA Practice Question

There are 534 practice questions for this study session.

CFA Practice Question

Select the correct statement(s):

I. Under the cash-basis method, warranty costs are charged to expenses as they are paid.
II. The current ratio is intended to indicate the long-run liquidity position of the firm.
A. I only
B. II only
C. Neither is correct

User Contributed Comments 5

User Comment
Yuyan Is the trade-in allowance on the old plant asset the same thing as the fair value of this asset?
cbb1 Trade-in allowance equals FMV of asset or selling price of asset, but don't recognize gain, simply assign book value of old asset to new asset. Basis of new asset is cash plus book value of old asset.
danlan Without income-tax method, A is right.
gill15 Tricked...without doing questions i would get whooped on this exam...

Current ratio fo SHORT TERM liquidity obligations.
bidisha Word Current = short
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