Chapter 17—Financial Statement Analysis

TRUE/FALSE

16. Using measures to assess a business's ability to pay its current

liabilities is called current position analysis.

ANS: T PTS: 1 DIF: Easy OBJ: 17-02

NAT: AACSB Analytic | AICPA FN-Measurement |
ACBSP-APC-23-Financial Statement Analysis

17. Current position analysis indicates a company's ability to liquidate

current liabilities.

ANS: T PTS: 1 DIF: Easy OBJ: 17-02

NAT: AACSB Analytic | AICPA FN-Measurement |
ACBSP-APC-23-Financial Statement Analysis

18. An advantage of the current ratio is that it considers the makeup

of the current assets.

ANS: F PTS: 1 DIF: Easy OBJ: 17-02

NAT: AACSB Analytic | AICPA FN-Measurement |
ACBSP-APC-23-Financial Statement Analysis

19. If two companies have the same current ratio, their ability to pay
short-term debt is the same.

ANS: F PTS: 1 DIF: Easy OBJ: 17-02