A Company Has Current Assets of $450,000 and a Current

question 157

Multiple Choice

A company has current assets of $450,000 and a current ratio is 2.5.Assume that the company prepays rent for 9 months in the amount of $20,000.The current ratio after this transaction is closest to:

• A) 2.39.
• B) 2.61.
• C) 2.5.
• D) 2.81.

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Definitions:

McCarran-Ferguson Act

A United States federal law that exempts insurance businesses from most federal regulation, allowing states to regulate the insurance industry.

Antitrust Legislation

Laws designed to promote fair competition and prevent monopolies, conspiracies, and other situations that restrain trade.

Judicial Law

Laws created by judges through court decisions and interpretations rather than those enacted by legislative bodies.

Statutory Law

Laws that are written and enacted by legislative bodies, distinguishing them from common law or regulations enacted by executive agencies.