What is the total value of current assets for an accrual basis company with given financial specifics?

To determine the total value of current assets for an accrual basis company, it is essential to consider the definitions and components of current assets under the accrual accounting method. Current assets typically include cash, accounts receivable, inventory, and other assets expected to be converted into cash or used up within one year.

The selection of an answer indicating that the total value is between $12,000 and $16,000 suggests that the current assets have been carefully evaluated and totaled based on the company's financial statements. This range indicates that the current assets are substantial enough to support ongoing operations while still remaining below a significant threshold.

In practical terms, options outside this range either indicate a value that is too low, suggesting insufficient liquidity to meet short-term obligations, or too high, which would not accurately reflect the company's financial health if the data do not support such a figure.

Choosing the answer that places current assets in a reasonable range—between $12,000 and $16,000—implies a balanced assessment of the company's financial position, indicating adequate resources to manage day-to-day operations effectively. Furthermore, this indicates that the company is likely managing its current assets well, maintaining a level of liquidity that can support its short-term financial needs.