Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Which of the following statements regarding liquidity ratios is false? A high current ratio generally indicates the ability to pay current liabilities on a timely

Which of the following statements regarding liquidity ratios is false?

A high current ratio generally indicates the ability to pay current liabilities on a timely basis.

A high acid-test ratio generally indicates the ability to pay current liabilities on a timely basis.

All current assets are due within one year and therefore have essentially equal liquidity.

As a rule of thumb, a current ratio of 1 or higher often reflects an acceptable level of liquidity.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing Leadership The Professional And Leadership Skills You Need

Authors: Brian D. Kush

1st Edition

0470450010, 9780470450017

More Books

Students also viewed these Accounting questions