The current ratio shows a company's ability to pay its short-term debts. The formula is current assets divided by current liabilities. This current ratio calculator calculates the proper...

Liquidity ratios show the ability of a company to pay its short-term debts. These include the current ratio, quick ratio, and cash ratio. Liquidity ratios compare current assets and current...

The current ratio shows a company's ability to pay its short-term debts. It is the most common measure of liquidity. It measures the ratio of current assets...

A merchandising company sells products or inventory. Accounting for retailers is more complex than for service companies. This is lesson 4 in our financial accounting series. These lessons...

What is an expense? Expense is a cost to operate a business to produce revenue. In accounting, an expense occurs when an asset is used. This could include a cash outflow or consuming an...

Adjusting entries are made at the end of a period to update accounts. An adjusting entry affects an income statement and balance sheet account. This is lesson 3 in our financial accounting...