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25 questions from the contractor business and law practice test.
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10 questions, graded as you go, with the reason for every answer. No sign-up.
A contractor's balance sheet shows current assets of $450,000 and current liabilities of $300,000. What is the current ratio?
Answer in ratio (to 1).
1.5 ratio (to 1)
Current ratio = current assets / current liabilities = $450,000 / $300,000 = 1.5.
Reference: Financial analysis: current ratio
A contractor has current assets of $380,000 and current liabilities of $245,000. What is the working capital?
Answer in dollars.
135000 dollars
Working capital = current assets - current liabilities = $380,000 - $245,000 = $135,000.
Reference: Financial analysis: working capital
Which of these is a current asset?
D. Accounts receivable due in 30 days
Current assets are cash and items expected to turn into cash within one year, such as receivables. Trucks and buildings are fixed (long-term) assets, and a note payable is a liability, not an asset.
Reference: Accounting principles: current vs non-current assets