Excerpts from Sydner Corporation's Most Recent Balance Sheet Appear Below

question 233

Multiple Choice

Excerpts from Sydner Corporation's most recent balance sheet appear below: Sales on account in Year 2 amounted to $1,390 and the cost of goods sold was $900. The current ratio at the end of Year 2 is closest to:

• A)1.67
• B)0.32
• C)0.80
• D)0.41

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Definitions:

Arbitraging

The practice of buying a product or asset in one market and selling it in another to profit from a difference in price between the two markets.

Transportation Costs

Expenses involved in moving goods or services from one location to another.

Real Price

The market price adjusted for inflation, showing the purchasing power of an amount of money.

CPI

The Consumer Price Index represents a calculated average of the prices for a mix of consumer products and services, including food, transportation, and healthcare, weighted by their importance.