If You Were Given the Components of Current Assets and of Current

question 76

Multiple Choice

If you were given the components of current assets and of current liabilities, what ratio(s) could you compute?

• A) Acid test or quick ratio
• B) Average collection period
• C) Current ratio
• D) Both A and C
• E) All of the above

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Definitions:

Mutual Assent

Mutual assent is a principle in contract law that states an agreement must involve a clear offer and acceptance between parties to be legally binding.

Consideration

In contract law, it refers to something of value exchanged between parties as part of a contract, required for the agreement to be legally binding.

Capacity

The legal ability, competency, or power to enter into a contract.

Legality

The state or quality of being in accordance with the law; adherence to the law.