You Have Been Provided the Following Information About High Inc

question 70

Multiple Choice

You have been provided the following information about High Inc.
$\begin{array}{|l|l|l|}\hline {\text { in thousands of dollars) }} & {2005} &{2006} \\\hline \text { Current Assets } & \$ 158 & \$ 163 \\\hline \text { Long Term Assets } & \$ 453 & \$ 502 \\\hline \text { Current Liabilities } & \$ 102 & \$ 143 \\\hline \text { Long Term Liabilities } & \$ 302 & \$348 \\\hline \text { Net Income } & \$ 32 & \$ 42 \\\hline\end{array}$
-Current Ratio for 2005 is:

• A) 1.55
• B) 1.51
• C) 1.50
• D) 1.14

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Definitions:

Going Concern Basis

An accounting principle that assumes a business will continue to operate and remain solvent in the foreseeable future.

Accounting Policy

The unique criteria, base assumptions, conventions, statutes, and approaches employed by a business in the development and disclosure of financial statements.

Measurement Bases

The various methods or approaches for determining the value at which assets, liabilities, income, and expenses are recognized and presented in financial statements.

Materiality

The notion of materiality guides the margin of error acceptable, the degree of precision required, and the extent of the disclosure required when preparing general purpose financial statements.