Ask Question
BusinessBusiness
22 September, 19:41

The acid-test ratio Group of answer choices is a quick calculation of an approximation of the current ratio. does not include all current liabilities in the calculation. does not include inventory as part of the numerator. does include prepaid expenses as part of the numerator.

+2
Answers (1)
  1. 22 September, 20:47
    0
    does not include inventory as part of the numerator

    Explanation:

    The acid test ratio is somewhat similar to the current ratio. Both ratios are called liquidity ratio in which the short term assets are converted into cash to pay its short term liabilities. But the only difference in these two is

    Current ratio includes current assets and current liabilities

    While on the other hand, the acid test ratio or quick ratio include quick asset and current liabilities

    Quick asset = Total Current assets - inventory - all other current assets

    As inventory takes more time to convert into cash
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “The acid-test ratio Group of answer choices is a quick calculation of an approximation of the current ratio. does not include all current ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers
You Might be Interested in
The aluminum and steel industry in a foreign country is dominated by just three firms and these firms control at least 80 percent of the domestic market. The market structure in this country is a (n)
Answers (1)
What does the statement "This note is legal tender for all debts, public and private" guarantee? a) US currency is backed by gold. b) US currency is backed by silver. c) US currency is a way of obtaining legal credit.
Answers (1)
At which stage of the creative process does a spontaneous breakthrough occur, allowing all of the previous stages to come together to produce the " factor" or the "light bulb goes on"?
Answers (1)
Your employer contributes $60 a week to your retirement plan. assume you work for your employer for another 20 years and the applicable discount rate is 9 percent. given these assumptions, what is this employee benefit worth to you today?.
Answers (1)
Sunset Foods relies on a highly centralized functional structure to ensure consistency in the quality and taste of its products and to drive down costs via process innovations.
Answers (1)
New Questions in Business
The Single European Act was put in place in an attempt to Multiple Choice convince Great Britain to remain in the EU. determine the viability of a common currency. expand the role of the EU into northern Africa.
Answers (1)
One reason to buy a home instead of rent a home is: AHomes have the potential to appreciate in value over time. BHomes have fewer maintenance costs. CBuying a home requires less money upfront. DBuying a home is a more flexible housing option.
Answers (1)
The following amounts are reported in the ledger of Mariah Company: Assets $ 78,000 Liabilities 41,000 Retained Earnings 9,000 What is the balance in the common stock account
Answers (1)
Which method of analysis does not classify variables as dependent or independent? A) regression analysis B) discriminant analysis C) cluster analysis D) analysis of variance
Answers (1)
An article is released detailing how Tech Company A has created software that is currently the best on the market. Tech Company A is expected to gain a major portion of market share for this type of software.
Answers (1)
Home » Business » The acid-test ratio Group of answer choices is a quick calculation of an approximation of the current ratio. does not include all current liabilities in the calculation. does not include inventory as part of the numerator.
Sign Up Forgot Password?