Having liabilities classified incorrectly will have a big impact on the company's current ratio.

Question

Quizplus · Accepted Answer

Liabilities are a key component of the current ratio, which is a measure of a company's ability to pay off its short-term debts. If liabilities are classified incorrectly (e.g. long-term debt is classified as current debt), it can impact the current ratio and potentially give an inaccurate representation of the company's financial health.

Having Liabilities Classified Incorrectly Will Have a Big Impact on the Company's