Accounting

What is the Cash Ratio?

What is the cash ratio? The cash ratio helps determine a company’s ability to pay its short-term liabilities with its most liquid assets that consist of cash and cash equivalents. I think most readers are clear on the definition of cash. However, cash equivalents probably needs some explaining. These are current assets that can quickly …

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Difference Between Accounts Payable and Accounts Receivable

Accounts Receivable vs Accounts Payable

What is the difference between accounts payable and accounts receivable? Accounting students or individuals first learning accounting on their own commonly get tripped up by the difference between accounts payable and accounts receivable. Hopefully the information below can clear up the difference between the two accounts. Let’s dig into the topic. Accounts Payable Accounts payable …

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