Final answer:
The current ratio of less than one indicates potential difficulty in paying short-term debt, not the ability to pay it. Therefore, the answer is B. False.
Step-by-step explanation:
The question concerns the interpretation of the current ratio, which is used in financial accounting to assess a company's ability to meet its short-term obligations with its short-term assets. The correct answer to the question is B. False. A current ratio of less than one suggests that a firm's current liabilities exceed its current assets, which may indicate that the firm might struggle to pay its short-term debts as they come due. A ratio of greater than one implies that a company has more short-term assets than short-term liabilities, which is generally considered a sign of good short-term financial health.