The Current Ratio Is Computed as Current Liabilities Divided by Current

question 163

True/False

The current ratio is computed as current liabilities divided by current assets.

---

Definitions:

Normal Balance

The typical side (debit or credit) on which an account increases, depending on the type of account.

Debit Balance

A balance in a financial account where the total debits exceed the total credits, common in asset and expense accounts.

Account

A record that summarizes all transactions related to a particular item or entity, used in financial accounting to track financial changes.

Dividends

Payments made by a corporation to its shareholders out of its profits.