Which of the Following Would Be an Appropriate Interpretation of a Current

question 63

Multiple Choice

Which of the following would be an appropriate interpretation of a current ratio of 1.76?

• A) The company earned $1.76 for every dollar of assets.
• B) The company has $1.76 of current assets for every dollar of current liabilities.
• C) The company's debt is 176% of its capital structure.
• D) The company has $1.76 of current assets for every dollar of total assets.

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Definitions:

Transfer of Completed Goods

The movement of goods that have been finished in the manufacturing process from the production area to inventory or directly to sales.

Work in Process

Inventory consisting of goods that are in the process of being produced but are not yet finished.

Finished Goods

Finished goods are products that have completed the manufacturing process and are ready to be sold to customers.

Overhead

Overhead refers to ongoing business expenses that are not directly tied to producing a specific product or service, such as rent, utilities, and administrative costs.