The formula for the current ratio is
A) current assets multiplied by current liabilities
B) assets multiplied by liabilities
C) current assets divided by current liabilities
D) assets divided by liabilities

Question

Quizplus · Accepted Answer

The current ratio is calculated by dividing current assets by current liabilities, so the correct choice is C. A is incorrect because it multiplies current assets and liabilities rather than dividing. B is incorrect because it multiplies all assets and liabilities, not just current ones. D is incorrect because it divides all assets by all liabilities, not just current ones.

The Formula for the Current Ratio Is