Long-term assets are $800, current liabilities are $500, and long-term liabilities are $600. If the current ratio is 2.5 to 1, then current assets are
A) $ 625
B) $1,250
C) $2,000
D) $ 200

Question

Quizplus · Accepted Answer

The current ratio is calculated as current assets divided by current liabilities. Given the current ratio is 2.5 and current liabilities are $500, current assets = 2.5 * $500 = $1,250.

Long-Term Assets Are $800, Current Liabilities Are $500, and Long-Term