All of the Following Regarding the Current Ratio Are True

question 50

Multiple Choice

All of the following regarding the current ratio are true except:

• A) Current ratio is calculated by dividing current assets by current liabilities.
• B) Current ratio can reveal challenges in covering short-term obligations if it is less than 1.
• C) Current ratio can affect a creditor's decision about whether to lend money to a company.
• D) Current ratio does not affect a creditor's decision on whether to allow a company to buy on credit.
• E) Current ratio helps to assess a company's ability to pay its debts in the near future.

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Definitions:

Special Education

An approach to educating children with intellectual disability in which they are grouped together and given a separate, specially designed education.

Low-IQ Children

Children who score significantly below the average range on standardized intelligence testing, potentially impacting their learning and development.

Public School

In many countries, a government-funded school that provides education to the public without charge. In other contexts, such as the UK, it refers to a historically prestigious, privately funded school.

Intellectual Disability

A term used when a person has certain limitations in mental functioning and in skills such as communicating, taking care of themselves, and social skills, beginning before adulthood.