Indicate whether each of the following statements is true or false.
1. Liquidity is the ability of a business to repay liabilities in the long run
2. The current ratio is a useful measure of liquidity
3. If a business does not plan to use any of its current assets to repay a debt, then that debt is listed as long term even if it is due within a year
4. Operating cycles for most businesses are less than one year
5. The current ratio is computed by dividing current assets by net income for the current period

Question

Quizplus · Accepted Answer

The Answer of Indicate whether each of the following statements is true or false.
1. Liquidity is the ability of a business to repay liabilities in the long run
2. The current ratio is a useful measure of liquidity
3. If a business does not plan to use any of its current assets to repay a debt, then that debt is listed as long term even if it is due within a year
4. Operating cycles for most businesses are less than one year
5. The current ratio is computed by dividing current assets by net income for the current period

Indicate Whether Each of the Following Statements Is True or False