The relationship between current assets and current liabilities is
A)useful in evaluating a company's liquidity.
B)called the matching principle.
C)useful in determining the amount of a company's long-term debt.
D)useful in determining profit.

Question

Quizplus · Accepted Answer

The relationship between current assets and current liabilities is useful in evaluating a company's liquidity as it shows the company's ability to meet its short-term obligations. It helps in determining if the company has enough liquidity to pay off its short-term debts as they come due.

The Relationship Between Current Assets and Current Liabilities Is