If the current assets are $856000 and the working capital is $654500, then the current liabilities will be ___________?
Correct answer: A. $201,500
- A. $201,500
- B. $401,500
- C. $501,500
- D. $301,500
Explanation
Since working capital equals current assets minus current liabilities, current liabilities are $856,000 − $654,500 = $201,500. This is the same relationship used in the preceding question in reverse.
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About Financial Statements
Financial statements present a business's financial performance and position through the income statement, statement of financial position, cash flow statement and changes in equity. Questions involve preparing and interpreting these statements, adjusting entries, depreciation, closing inventory, accrued and prepaid items, and distinguishing profit from cash flow.
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