Calculate the Current Ratio Given the Following Information: Current Liabilities

question 179

Multiple Choice

Calculate the current ratio given the following information: current liabilities = $40,000; sales = $90,000; cost of goods sold = $32,000; cash ratio = 1.10; accounts receivable turnover = 5;
Inventory turnover = 3.

• A) 1.60
• B) 1.70
• C) 1.80
• D) 1.90
• E) 2.00

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Definitions:

Validity

The extent to which a concept, conclusion, or measurement is well-founded and corresponds accurately to the real world.

Intelligence

The capacity for learning, understanding, reasoning, problem solving, and adapting to new situations.

Construct Validation

The strategy of establishing the validity of a measure by comparing it with a wide range of other measures.

Internal Validation

The process of seeking or achieving a sense of validation or approval from oneself rather than from external sources.