Which of the following statements regarding liquidity ratios is false?
A) A high current ratio generally indicates the ability to pay current liabilities on a timely basis.
B) A high acid-test ratio generally indicates the ability to pay current liabilities on a timely basis.
C) All current assets are due within one year and therefore have essentially equal liquidity.
D) As a rule of thumb, a current ratio of 1 or higher often reflects an acceptable level of liquidity.
Answer: C
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