The following balance sheet information is provided for Greene Company for Year 2: What is the company's quick (acid-test)ratio? (Round your answer to 1 decimal place.)
A)0.7
B)1.4
C)1.3
D)3.8

Question

The following balance sheet information is provided for Greene Company for Year 2:  What is the company's quick (acid-test)ratio? (Round your answer to 1 decimal place.)
A)0.7 
B)1.4 
C)1.3 
D)3.8

Quizplus · Accepted Answer

Quick Ratio = (Cash + Accounts Receivable) / Current Liabilities
Quick Ratio = ($12,000 + $60,000) / $50,000
Quick Ratio = $72,000 / $50,000
Quick Ratio = 1.44
Round off to 1 decimal place
Quick Ratio = 1.4

The Following Balance Sheet Information Is Provided for Greene Company