Johnson owns a farm business. The business has $10,000 in cash and $80,000 in other assets. The total liability for the business is $65,000. Johnson owns a farm business. The business has $10,000 in cash and $80,000 in other assets. The total liability for the business is $65,000.

1. what is the current ratio?

2. The degree to which a farm's assets adequately cover financial obligations as they come due without disrupting the normal operations of the business is...

A. working capital

B. liquidity

C. solvency

D. profitability

3. According to the cash accounting method, expenses are recorded:

A. when they are accrued

B. when they are paid

C. at the end of each month

D. all of the above

4. the current ratio is a measure of a farm/ranch business's:

A. ability to pay short-term debt obligations

B. return on investment in current asset

C. return on owner equity