Which of the Following Ratios Is Least Useful in Evaluating

question 53

Multiple Choice

Which of the following ratios is least useful in evaluating a company's ability to pay its current obligations when they come due?

• A)current ratio
• B)quick ratio
• C)cash ratio
• D)return on assets ratio

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Definitions:

Full-cost Method

Accounting practice where all direct and indirect fixed and variable costs are allocated to inventory until the products are sold.

IFRS

A set of accounting standards named International Financial Reporting Standards, developed globally by the International Accounting Standards Board (IASB).

Expensed

Refers to the accounting practice of recognizing a cost as an expense in the income statement in the period it is incurred.

Maintenance

The process of preserving a condition or situation or the process of keeping something in working order by regularly servicing it.