How are prepaid expenses used in each of the following ratios? Current ratio Quick ratio A)Numerator Denominator B)Numerator Numerator C)Numerator Not used D)Not used Numerator

Question

Quizplus · Accepted Answer

Prepaid expenses are not used in either the current ratio or the quick ratio. The current and quick ratios focus on the liquidity and availability of current assets to meet current liabilities, respectively. Prepaid expenses are considered a current asset, but they are not immediately available as cash or a liquid asset, so they are not included in either of these ratios.

How Are Prepaid Expenses Used in Each of the Following