The measures most often used in evaluating solvency-the current ratio,quick ratio,and amount of working capital-are developed from amounts appearing in the:
A)Balance sheet.
B)Income statement.
C)Statement of retained earnings.
D)Statement of cash flows.

Question

Quizplus · Accepted Answer

The current ratio, quick ratio, and amount of working capital are all based on amounts appearing in the balance sheet, which is the financial statement that shows a company's assets, liabilities, and equity at a specific point in time. Therefore, the correct answer is A, balance sheet.

The Measures Most Often Used in Evaluating Solvency-The Current Ratio,quick