If a Retail Store Has a Current Ratio of 2

question 110

Multiple Choice

If a retail store has a current ratio of 2.5 and current assets of $195,000,the amount of working capital is:

• A)$ 78,000
• B)$380,000
• C)$330,000
• D)$117,000

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Definitions:

Liquidation Proceeding

A legal process in which a business closes down and its assets are distributed to claimants.

Chapter 7

A provision of the US Bankruptcy Code that involves the liquidation of a debtor's assets to pay off creditors.

Assignment

The transition of rights, possessions, or obligations between parties.

Pro Rata

A portion or share of something that is distributed or allocated in equal proportion to the whole.