Which of the following statements is not true about the current ratio? A benchmark of 3.00 to 1.00 is believed to be the ideal benchmark for the current ratio of a company. The current ratio measures an organization’s liquidity. The current ratio is found by dividing current assets by current liabilities. A current ratio below 1.00 to 1.00 signals the potential for financial difficulties.

Which of the following statements is not true about the current ratio? A benchmark of 3.00 to 1.00 is believed to be the ideal benchmark for the current ratio of a company. The current ratio measures an organization’s liquidity. The current ratio is found by dividing current assets by current liabilities. A current ratio below 1.00 to 1.00 signals the potential for financial difficulties.

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter14: Completing A Quality Audit

Section: Chapter Questions

Problem 24CYBK

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