A Company Has Current Assets of $105,000 and Current Liabilities

question 27

Multiple Choice

A company has current assets of $105,000 and current liabilities of $35,000.It made a $5,000 sale on account.After this transaction,its current ratio will be:

• A)0.33.
• B)1.14.
• C)3.00.
• D)3.14.

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Definitions:

Life Estate

A property interest that lasts for the life of a specific individual, after which the property reverts to the owner or moves to a different designated party.

Warranty of Title

A guarantee provided by a seller that they have the right to sell the property and that it is not encumbered by any undisclosed liens or claims.

Encumbrances

Legal claims or liabilities attached to property that affect its use, value, or transfer, such as mortgages, liens, or easements.

Title Insurance

Insurance policy that protects property buyers and lenders against loss or damage due to defects or issues with the property's title.