Determine the Value of Cash Equivalents Given the Following Information

question 72

Multiple Choice

Determine the value of cash equivalents given the following information: cash ratio = 2.5; cash = $1,500 ; current liabilities = $900

• A) $850
• B) $800
• C) $750
• D) $700
• E) $650

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Definitions:

Budgeted Item

An expense or income that has been planned for and included in a budget.

Traded Asset

An asset that is bought and sold in financial markets, such as stocks, bonds, commodities, or currencies.

Capital Expenditure

Capital invested by an enterprise in procuring or upgrading solid assets such as land, manufacturing facilities, or hardware.

Equity Account

An account representing the owner's interest in the company, calculated as total assets minus total liabilities.