Which of the Following Statements Is True About a Current

question 95

Multiple Choice

Which of the following statements is true about a current ratio of 1.5?

• A) There is $1.50 of current assets available to pay every dollar of current debt.
• B) There is $1.50 of owner's equity available to pay every dollar of total debt.
• C) The current liabilities are to be repaid at 1.5 times their value.
• D) The current liabilities are 1.5 times of current assets.

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Definitions:

U.S. Inflation

U.S. Inflation is the rate at which the general level of prices for goods and services is rising, eroding purchasing power, in the United States over time.

International Gold Standard

A monetary system in which the value of a country's currency is directly linked to a specified amount of gold, facilitating international trade and investment by establishing exchange rates based on gold parity.

Exchange Rates

The value of one currency for the purpose of conversion to another.

British Pounds

The official currency of the United Kingdom, known as GBP (Great Britain Pound).