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

Question

Quizplus · Accepted Answer

The relationship between current assets and current liabilities is useful in evaluating a company's liquidity. It provides an indication of the company's ability to meet its short-term obligations with its current resources.

The Relationship Between Current Assets and Current Liabilities Is