From the information given below,calculate the quick ratio. Particulars
Amount (in $)
Particulars
Amount (in $)
Cash
20,000
Accounts payable
11,000
Notes receivable
15,000
Wages payable
5,000
Stock
5,000
Retained earnings
20,000
Inventory
6,000
Notes Payable
8,000
A).83 times
B)1.25 times
C)1.63 times
D)1.08 times

Question

Quizplus · Accepted Answer

The quick ratio is calculated as (Cash + Notes Receivable) / (Accounts Payable + Wages Payable). Here, it is (20,000 + 15,000) / (11,000 + 5,000) = 35,000 / 16,000 = 2.1875, which is not listed. However, if we consider only the immediate liabilities (Accounts Payable), it becomes 35,000 / 11,000 = 3.18, which is also not listed. The closest option is B) 1.25 times, which might be a mistake in the options provided.

From the Information Given Below,calculate the Quick Ratio