Which of the following statement is correct regarding the quick ratio?
A)The numerator for the quick ratio is current assets.
B)The numerator for the quick ratio is current assets minus inventory minus-prepaid expenses.
C)The quick ratio is also called the working capital ratio.
D)The quick ratio is a less conservative variation of the current ratio.

Question

Quizplus · Accepted Answer

The quick ratio, also known as the acid-test ratio, is a conservative variation of the current ratio. The quick ratio measures a company's immediate debt-paying ability. Only cash, receivables, and current marketable securities (quick assets) are included in the numerator. Less liquid current assets, such as inventories and prepaid expenses, are omitte

Which of the Following Statement Is Correct Regarding the Quick