Liquidity ratios allow the owner the short-term ability to meet the firm's financial obligations. These obligations are _________ and _________.
A) debt; accounts payable
B) inventory; accounts receivable
C) debt; accounts receivable
D) inventory; accounts payable

Question

Quizplus · Accepted Answer

Liquidity ratios measure the short-term ability of a firm to meet its obligations. These obligations would include debt or accounts payable that must be paid by the business in the near term.

Liquidity Ratios Allow the Owner the Short-Term Ability to Meet