The Yipsilon Company has current assets of $50,000 and current liabilities of $45,000. Its current ratio, therefore, must equal .9.

Question

Quizplus · Accepted Answer

The current ratio is calculated by dividing current assets by current liabilities. In this case, the current ratio would be calculated as:

Current Ratio = Current Assets / Current Liabilities
Current Ratio = $50,000 / $45,000
Current Ratio = 1.11

Therefore, the statement is false, and the current ratio would be 1.11, not 0.9.

The Yipsilon Company Has Current Assets of $50,000 and Current