Which of the Following Statements Is FALSE About the Current

question 131

Multiple Choice

Which of the following statements is FALSE about the current ratio?

• A)Instead of using the dollar amounts,the current ratio makes it easier to compare several companies.
• B)The current ratio is used to evaluate a company's ability to pay current obligations.
• C)Having more current assets than current liabilities will yield a current ratio less than 1.
• D)A high current ratio suggests good liquidity.

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Definitions:

Pure Capitalism

An economic system characterized by private ownership of resources and businesses, with minimal government intervention in economic activities.

Pure Command System

An economic system characterized by the public ownership of resources and centralized planning.

Economic Questions

Economic questions are fundamental queries about how societies allocate scarce resources to produce goods and services for consumption, including decisions on what, how, and for whom to produce.

Resource Distribution

Refers to the allocation of resources, including land, labor, and capital, among different uses and geographic areas, affecting economic outcomes and efficiencies.