Which of the following is true regarding the relationship between the current ratio and the acid-test ratio?
A) The current ratio will always be equal to or larger than the acid-test ratio for a specific company.
B) The acid-test ratio will always be equal to or larger than the current ratio for a specific company.
C) Either the current ratio or the acid-test ratio could be larger for a specific company.
D) One ratio will always exceed 1.0, while the other will always be less than 1.0.
Answer: A
If the answers is incorrect or not given, you can answer the above question in the comment box. If the answers is incorrect or not given, you can answer the above question in the comment box.