The Relationship Between Current Assets and Current Liabilities Is Important

question 63

Multiple Choice

The relationship between current assets and current liabilities is important in evaluating a company's

• A) profitability.
• B) liquidity.
• C) market value.
• D) accounting cycle.

---

Definitions:

Location

The specific place or position where something exists or is situated, often relevant in context to strategic planning or real estate.

Carrying Inventory

The process of holding goods in stock by a business, awaiting sale or further processing, which involves storage costs and management.

Inventory Turnover

A measure of how quickly inventory is sold and replaced over a specific period, indicating the efficiency of inventory management.

Items Per Transaction

This measures the average number of products purchased in a single sales transaction.