Match the term with its definition.
-A measure of a company's relative liquidity, determined by dividing current assets by current liabilities
A)accounts payable (trade credit)
B)accounts receivable
C)accumulated depreciation
D)common stock
E)current assets (working capital)
F)current debt (short-term liabilities)
G)current ratio
H)fixed assets (property, plant, and equipment [PPE])
I)gross fixed assets
J)net fixed assets
K)other assets

Question

Quizplus · Accepted Answer

The current ratio is a measure of a company's relative liquidity and is determined by dividing current assets by current liabilities.

Answer: E
 Current assets or working capital refers to a company's short-term assets that can be easily converted into cash within a year.

Answer: F
 Current debt or short-term liabilities refer to a company's obligations that are due within a year.

Answer: J
 Net fixed assets refer to a company's fixed assets minus accumulated depreciation, which reflects the value of the assets that have been used up over time.

Match the Term with Its Definition