What is an Ideal Current Ratio?
The current ratio is a financial metric that measures a company’s ability to pay its short-term liabilities with its short-term assets. It is calculated by dividing current assets by current liabilities. The resulting ratio provides insight into a company’s liquidity and ability to meet its current obligations. An ideal current ratio varies depending on the […]
What is Prepaid Expense? Journal Entry in Books
Prepaid expenses are expenses that a company or business pays for in advance but which have not yet been incurred or used. These expenses can include items such as rent, insurance premiums, and utility bills. Prepaid expenses are considered assets because they represent a future benefit to the company. When a company pays for a […]