A Measure of a Company's Ability to Pay Current Liabilities

question 148

Multiple Choice

A measure of a company's ability to pay current liabilities with current assets is the:

• A)liability ratio.
• B)current ratio.
• C)debt ratio.
• D)asset ratio.

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Definitions:

Universal Specification

A set of guidelines or criteria designed to be applicable across a wide range of products, services, or industries.

Capital Assets

Long-term assets acquired or owned by a business or corporation that are used in the production of goods or services and are not expected to be consumed or converted into cash within a year.

Organization Operations

The day-to-day activities and tasks that a company or organization undertakes to accomplish its business goals and objectives.

Specification

A detailed description of the design, materials, quality, and performance standards that a product, service, or process must meet.