The Szett Company has current assets of $650,000 and total liabilities of $430,000. Its current ratio is 2. The portion of current liabilities, therefore, must be equal to $300,000.

Question

Quizplus · Accepted Answer

The current ratio is calculated as current assets divided by current liabilities. Given the current ratio is 2, and current assets are $650,000, the current liabilities would be $650,000 / 2 = $325,000, not $300,000.

The Szett Company Has Current Assets of $650,000 and Total