Assume the Following Data: Current Assets = 500; Current Liabilities

question 40

Multiple Choice

Assume the following data: Current assets = 500; Current liabilities = 250; Inventory = 200; Accounts receivable = 200. Calculate the current ratio.

• A)2.0
• B)1.5
• C)1.0
• D)2.5

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Definitions:

Interest Earned

The income received from investments in securities such as savings accounts, certificates of deposit (CDs), bonds, or loans.

Insolvent Company

A company that is unable to pay its debts as they come due, or whose liabilities exceed its assets in value.

Unsecured Liabilities

Debts or obligations that do not have specific assets pledged as collateral in case of default.