[amp_mcq option1=”Current Liabilities < Current Assets\" option2=\"Fixed Assets > Current Assets” option3=”Current Assets < Current Liabilities\" option4=\"Share Capital > Current Assets” correct=”option3″]<\/p>\n
The correct answer is C. Current Assets < Current Liabilities.<\/p>\n
A current ratio of less than one means that a company’s current assets are less than its current liabilities. This means that the company has more short-term debts than it has short-term assets to cover those debts. This can be a sign of financial difficulty, as it means that the company may not be able to pay its bills on time.<\/p>\n
Option A is incorrect because it states that current liabilities are less than current assets. This would mean that the company has more short-term assets than it has short-term debts, which would be a good sign.<\/p>\n
Option B is incorrect because it states that fixed assets are greater than current assets. Fixed assets are long-term assets, such as land and buildings, while current assets are short-term assets, such as cash and accounts receivable. It is not possible for fixed assets to be greater than current assets.<\/p>\n
Option D is incorrect because it states that share capital is greater than current assets. Share capital is the amount of money that has been invested in the company by its shareholders. It is a long-term asset, not a short-term asset. It is not possible for share capital to be greater than current assets.<\/p>\n","protected":false},"excerpt":{"rendered":"
[amp_mcq option1=”Current Liabilities < Current Assets\" option2=\"Fixed Assets > Current Assets” option3=”Current Assets < Current Liabilities\" option4=\"Share Capital > Current Assets” correct=”option3″]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[945],"tags":[],"class_list":["post-59870","post","type-post","status-publish","format-standard","hentry","category-financial-management","no-featured-image-padding"],"yoast_head":"\n