If Line Ltd Has a Current Ratio of 2

question 66

Multiple Choice

If Line Ltd has a current ratio of 2.5:1 and current assets are $600,000, how much are the company's current liabilities?

• A)$240,000.
• B)$300,000.
• C)$360,000.
• D)$200,000.

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Definitions:

Bonus Dividends

Additional dividends paid to shareholders, above regular dividends, typically issued in the form of extra shares.

Revaluation

An adjustment of the carrying value of an asset or liability to its current fair value.

Consolidated Statement

A financial statement that presents the financial position and results of operations of a parent and its subsidiaries as if they were a single economic entity.

General Reserve

Funds set aside by a company from its profits for general unspecified future needs or to strengthen the company's financial position.