If the Current Ratio Is 2

question 62

Multiple Choice

If the current ratio is 2.5 to 1,net income is $6,000,and current liabilities are $18,000,how much is working capital?

• A)$ 6,000
• B)$ 14,000
• C)$ 27,000
• D)$ 45,000

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Definitions:

Sellers

Individuals or businesses that provide goods or services to consumers in exchange for payment.

Tax

A compulsory financial charge or some other type of levy imposed upon a taxpayer by a governmental organization in order to fund public expenditures.

Corporations' Profits

The financial earnings that remain for a corporation after all expenses, taxes, and costs have been deducted from total revenue.

Taxes

Mandatory financial charges or levies imposed by a government on its citizens and businesses as a source of revenue for the government, used to fund public services and goods.