Which of the following is incorrect?
A)Current liabilities are those that will be satisfied within one year or the operating cycle, whichever is longer.
B)Liquidity is the ability of the company to meet its total obligations.
C)Current liabilities impact a company's liquidity.
D)Working capital is equal to current assets minus current liabilities.

Question

Quizplus · Accepted Answer

Liquidity is the ability of the company to meet its short-term obligations, not total obligations. Total obligations include both short-term and long-term liabilities, while liquidity only refers to the availability of cash to meet short-term obligations.

Which of the Following Is Incorrect