If the Current Ratio Is 2 to 1 and Current

question 118

Multiple Choice

If the current ratio is 2 to 1 and current assets equal $200,000, how much is working capital?

• A)$0
• B)$100,000
• C)$200,000
• D)$300,000

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Definitions:

Personal Income Tax

A tax levied on an individual's income, including wages, salaries, and other earnings, by the government.

Benefits-Received Principle

A theory in tax policy stating that taxes should be levied in accordance with the level of government services and benefits an individual or entity receives.

Revenue

The income generated from normal business operations and includes discounts and deductions for returned merchandise.

Income Taxes

Taxes levied by the government on the income of individuals or organizations.