Which of the following is not a reason that the relationship between current and non-current assets important?
A)Firms having too much funds tied up in non-current assets can lead to business failure.
B)In case of financial difficulty, non-current assets are often difficult to sell.
C)It shows the ability of the business to pay long-term obligations.
D)Converting non-current assets to cash often results in a loss to the business.

Question

Quizplus · Accepted Answer

The relationship between current and non-current assets is important primarily for understanding liquidity and operational efficiency, rather than directly showing the ability of the business to pay long-term obligations. This is more directly related to the relationship between assets and liabilities, both current and non-current.

Which of the Following Is Not a Reason That the Relationship