Question
Corporation A and B both have a current ratio of 2:1. Corporation A has Cash of $20,000, Inventories of $10,000. Corporation B has Cash of
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Corporation A and B both have a current ratio of 2:1. Corporation A has Cash of $20,000, Inventories of $10,000. Corporation B has Cash of $2,000 and Inventories of $28,000. Which of the following statements is true?
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Both companies have current liabilities of $10,000
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Corporation A is more liquid than Corporation B
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Both companies have the same liquidity position
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None of the above
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Auditing A Practical Approach
Authors: Robyn Moroney, Fiona Campbell, Jane Hamilton
4th Edition
0730382648, 978-0730382645
