A Company with Working Capital of $500,000 and a Current

question 50

Multiple Choice

A company with working capital of $500,000 and a current ratio of 2.25 pays a $100,000 short-term liability. The amount of working capital immediately after payment is:

• A) $600,000.
• B) $400,000.
• C) $500,000.
• D) $100,000.

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Definitions:

Parol Evidence Rule

The parol evidence rule is a legal principle that prevents parties in a written contract from presenting external evidence that contradicts or adds to the written terms of the contract.

Statute Of Frauds

A legal concept that requires certain types of contracts to be written and signed in order to be legally enforceable.

At Will

Refers to employment arrangements where either the employer or employee can end the employment relationship at any time, for any reason not prohibited by law, and without prior notice.

Statute Of Frauds

A legal doctrine requiring certain agreements to be in written form and signed by all parties to be legally binding, aiming to prevent fraud and perjuries.