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  1. (C) Current ratio compares the current liabilities that will become liquid at a period of 12 months with the current liabilities that will be paid at the same period [ CITATION Hri04 l 1033 ].

  2. (B) Accounts receivable less the allowance for doubtful debt will be equal to credit to allowance for doubtful debt.

  3. (C) ROA= Total Net Income/ Total Assets x 100.

  4. (A) Bonds can be issued at a fixed rate of interest which is known as coupon rate until it matures. The selling of bonds at a secondary market will be affected by the current interest rate ant the length of time of its maturity.

  5. (D) Interest is the annual percentage of the outstanding loan.

  6. (A) I= P x R x T Where: p is the principle, r is the rate in percentage and t is the time.

  7. (B) Contingent liability is the potentiality of an event happening or not happening in the future.

  8. (A) I= P x R x T

  9. (A) Capital lease is the lease where the lesser provides finances of the asset and the lessee has all the rights towards the asset.

  10. (D) Classified loans have interest that has not been paid.

  11. (B) Maturity date is the date in which the principle amount becomes due and is paid back to the person who gave the loan and the interest provided stops.

  12. (A) This will be based on the fact that one is adhering and accepting the facts, where everyone is in concurrence.

  13. (A) Allowance method is one way in which a company derives an estimated value of bad debts.

  14. (B) Carrying amount is also known as the book value. It is the amount in the company’s book as assets or liabilities.

  15. (B)Bank reconciliation is prepared to prove that differences can be made to agree with each other. That is in the cash book and the bank account

  16. (A) Remittance advice is a letter from the customer to the supplier to inform them that the invoice provided to them by the supplier has been paid.

  17. (B) Debit cash, debit discount on bonds payable and credit bonds payable.

  18. (B) Assets are properties owned by the business. They can be items that can be touched and seen, these are the tangible assets.

  19. (D)In double entry, credit is obtained when there is a decrease in assets increase in liability or increase in capital.

  20. (B) Controller ensures that the financial statements are accurate and timely.


Bhattacharya, Hrishikesh. Working Capital Management: Strategies and Techniques. New Delhi: PHI Learning Pvt. Ltd, 2004.


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When I joined college, I had little knowledge regarding the businessworld or even the best business to start and the steps to take toensure it is successful. However, through this course, I have gainedenormous knowledge regarding the business world and how tosuccessfully run a business. During the course studies, I have comerealize that the form of business ownership is a limited liabilitycompany. This is because the owner of the business does not carry theliability of losses incurred by the company. This is unlike in soleproprietorship where the owner carries the responsibility of lossesincurred by the business (Toolkit Media Group, 2013). I wouldtherefore use the knowledge that I have gained regarding forms ofbusiness ownerships to start a limited liability company. Since Iintend to start laundry business in my hometown, I would start thebusiness as limited liability Company which deals with laundrybusiness.

Throughout the course studies at college, I have also learnt thatmarketing is an integral part of any business’s success. I learntthat it is critical to select the modes of marketing that would reachyour target customers. This brings in another aspect that I learntwhich asserts that every business establishment should have itstarget customers such as the youth, the elderly or married couples.In establishing my limited liability company, I would have the targetcustomers before embarking on a marketing strategy. For instance, ina business that targets the youth, I would utilize the social mediasites such as Facebook and Twitter to reach the youth. Whenestablishing my laundry business in my hometown, I would useknowledge to come up with a successful marketing plan that wouldensure that I penetrate the market.

During my course at college, I have also learnt that it is prudentto understand the business environment before venturing into it. Thisimplies that if I intend to venture into the manufacture and sale ofcomputers, there is need to understand the market and thecompetitors. It is essential to understand the strategies that othercompetitors such as Apple and Microsoft are using in order to come upwith an effective strategy that would counter their strategies. Inestablishing my laundry business, I would use this knowledge to carryout a thorough analysis of the business environment within myhometown to establish the number of laundry businesses and theirweaknesses which would later capitalize on.

On the area of management, I have learnt that the management of anybusiness determines its success. It is always prudent to hire acompetitive and experienced person to manage the business. Expertbusiness management is essential for every business’s success(Toolkit Media Group, 2013). In today’s business world, customersare considering the ethical standards of the business beforepurchasing. I have learnt that there is immense need for a businessestablishment to relate well with the community and to engage incorporate social responsibility activities. In this regard, I wouldwish to engage my employees in activities such as cleanups whichwould ensure that my business has a cordial relationship with thecommunity.

Lastly, I have learnt that every business requires effectiveaccounting books. There is need to record every sale, purchase,profit, loss or any other form of expenditure within the business.Accounting helps in determining whether the business is growing,making profit or making a loss (Toolkit Media Group, 2013). It isworth noting that managers make decisions regarding the company basedon the accounting reports. It is clear that the knowledge that I havegained during my course studies would help me greatly in starting andrunning a successful laundry business.


Toolkit Media Group. (2013).&nbspStart, run &amp grow asuccessful small business. Riverwoods, Ill: Toolkit MediaGroup/Wolters Kluwer.

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