ABC Company Has Total Assets of $360,000 and Total Liabilities

question 148

Multiple Choice

ABC Company has total assets of $360,000 and total liabilities of $200,000. The company collects an account receivable of $20,000. After this transaction, the company's debt ratio will be:

• A) 0.56.
• B) 1.56.
• C) 1.80.
• D) 1.90.

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Definitions:

Ration

The controlled distribution of scarce resources, goods, or services.

Equilibrium Price

Equilibrium price is the market price at which the quantity of goods supplied is equal to the quantity of goods demanded.

Surplus

Occurs when the quantity supplied of a product exceeds the quantity demanded at a given price, often leading to price reductions.

Price Ceiling

A government-imposed limit on how high a price can be charged for a product, service, or resource, usually intended to protect consumers from high prices.