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The relationship between current assets and current liabilities is called:_______
a) the matching principle.
b) useful in determining income.
c) useful in evaluating a company's liquidity.
d) useful in determining the amount of a company's long-term debt.

Respuesta :

Answer:

Option "C" is correct.

Explanation:

Option "C" is correct because the current assets and current liabilitites are used to find the liquidity. The current liabilities are the one that has to pay within the year. Similarly, the current assets are the ones that can be converted into cash within the year. Therefore, the evaluation of both gives the idea of the company's liquidity.

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