A Company Has $200 in Cash, $500 in Accounts Receivable

question 142

Multiple Choice

A company has $200 in cash, $500 in accounts receivable, and $700 in inventory. If current liabilities are $400, then the current ratio would be

• A) 1.75 to 1
• B) 3.50 to 1
• C) 2.25 to 1
• D) 3.00 to 1

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Definitions:

Executory Contracts

Contracts under which both parties to the agreement have duties remaining to be performed. If a contract's major obligations are unfulfilled by both parties, it is seen as executory.

One-Year Provision

The one-year provision is a legal clause, often found in statutes of frauds, which requires certain contracts to be in writing and signed if they cannot be performed within one year.

Majority Rule

A principle in democracy stating that the decisions and choices of the greater number of participants should guide the actions and policies of the group.

Integrated Contracts

An integrated contract is a written agreement that constitutes the final and complete understanding between parties, encompassing all terms and conditions.