Which of the Following Statements Is an Accurate Interpretation of the Current

question 104

Multiple Choice

Which of the following statements is an accurate interpretation of the current ratio?

• A) A current ratio of 1.5 or higher is considered a high-risk ratio.
• B) A current ratio below 1.00 is considered a good, safe ratio.
• C) A current ratio of 2.0 indicates very strong ability to pay current liabilities.
• D) A current ratio of 0.60 or lower is a good, safe ratio.

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Definitions:

Festinger

A psychologist known for his theory of cognitive dissonance, which suggests that people experience psychological discomfort when holding two or more contradictory beliefs.

Cognitive Dissonance

A psychological phenomenon where an individual experiences discomfort due to holding conflicting beliefs or attitudes, leading to an alteration in one of the beliefs or attitudes to reduce the discomfort.

Reducing Techniques

Strategies or methods used to decrease anxiety, stress, or other negative emotional states.

Bem's Self-Perception Theory

A psychological theory suggesting that people often infer their own attitudes and feelings from observing their behavior and the context in which it occurs, rather than initially recognizing inner attributes as the cause.