Use This Balance Sheet and Income Statement to Answer the Following

question 9

Multiple Choice

Use this balance sheet and income statement to answer the following question.Use ending balances whenever average balances are required for computing ratios. The current ratio for National Textile is

• A)1.20.
• B)1.75.
• C).67.
• D)1.50.

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Definitions:

Consistency

Use of the same accounting principles and methods from year to year within a company.

Accounting Principles

The rules and guidelines that companies follow in preparing financial statements, ensuring consistency and comparability.

Faithfully Representative

A qualitative characteristic of financial information that requires reported data accurately reflect the economic phenomena they represent, ensuring reliability and trustworthiness.

Accounting Information

Financial data and reports that provide insight into a company's financial performance and position, aiding decision-making processes.