The current ratio is determined by dividing current assets by current liabilities. The acidtest
ratio is determined by dividing quick assets by current liabilities. At December 31. Year 1. The current ratio is 6 to 1 [(US $40,000 + $120,000 + $200,000) - $60,01101. December
31. Year 2, the current ratio is 4.3 to 1 [(US $30,000 + $100,000 + $300,000) -$100,000]. Hence, there was a decrease in the current ratio. At December 31, Year 1, the acid-test ratio is 2.667 to 1 [(US $40,000 + $120,000) - $60.000]. At December 31, Year 2, the acid-test ratio is 1.3 to 1 [(US $3:0,000 + $100,000) - $100,000]. Thus, the acidtest ratio also declined. An entity's financial statements for the current year are presented below:

Payment by draft, a three-parry instrument in which the drawer orders the drawer to pay money to the payee, is a means of slowing cash outflows A check is the most common type of draft. Check float arises from the delay between an expenditure and the clearing of the check through the banking system.

The value added is the difference between the value of the output and the value of the purchased inputs. Value-added tax payable equals the value-added tax rate times value added, or US $587,500 [($2,500,000 $150,000) x .25].