Which of the following is included in the computation of the quick ratio?
A)Net Sales
B)Working capital
C)Average daily sales
D)Accounts receivable

Question

Quizplus · Accepted Answer

The quick ratio, also known as the acid-test ratio, is a measure of a company's ability to meet its short-term obligations using its most liquid assets. It calculates a company's ability to cover its current liabilities with assets that can be quickly converted to cash. Accounts receivable is included in the computation of the quick ratio because it represents money owed to the company from customers that will be converted into cash relatively quickly. Net sales, working capital, and average daily sales are not included in the computation of the quick ratio.

Which of the Following Is Included in the Computation of the Quick