Dollar Ltd has a current ratio of 2:1. This means that:
A)there is $2 of current assets for every $1 of current liabilities.
B)its current assets are half its current liabilities.
C)its current assets are insufficient to meet its current liabilities.
D)its current assets are equal to its current liabilities.

Question

Quizplus · Accepted Answer

A current ratio of 2:1 means that there are $2 of current assets for every $1 of current liabilities, indicating that the company has sufficient current assets to meet its current liabilities.

Dollar Ltd Has a Current Ratio of 2:1