Describe differences between the current and cash ratios

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1. Why is the liability for warranties recognized when products are sold rather than when the warranty services are performed?

2. Describe the circumstances under which the current, quick, and cash ratios, respectively, are more appropriate measures of short-term liquidity than the other ratios?

3. Describe the differences between the current, quick, and cash ratios. Which one is the most conservative measure of short-term liquidity?

4. How does the rationale for the operating cash flow ratio differ from the rationale for the current, quick, and cash ratios?

Reference no: EM13938464

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