Calculate the Current Ratio Given the Following Information: Current Liabilities

question 183

Multiple Choice

Calculate the current ratio given the following information: current liabilities = $55,000; sales = $250,000; cost of goods sold = $120,000; cash ratio = 0.91; accounts receivable turnover = 6.25; inventory turnover = 2.

• A) 2.63
• B) 2.73
• C) 2.83
• D) 2.93
• E) 3.03

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Definitions:

Promissory Note

A financial instrument involving a written promise by one party to pay another a definite sum of money either on demand or at a specified future date.

Simple Interest

Interest calculated only on the original principal, not on the accumulated interest from previous periods.

Maturity Value

The amount payable to an investor at the end of a debt instrument's life, including both the principal and the interest.

Promissory Note

A financial document in which one party promises in writing to pay a determinate sum of money to another, either at a fixed or determinable future time or on demand.