Which account is used in the current ratio but not the quick ratio?
A) marketable securities
B) accounts payable
C) accounts receivable
D) inventory

Question

Quizplus · Accepted Answer

The current ratio takes into account both current assets (cash, marketable securities, accounts receivable, and inventory) and current liabilities (accounts payable, accrued expenses, and other short-term debts) to determine a company's ability to pay off its debts in the short term. The quick ratio, on the other hand, only considers the most liquid assets (cash, marketable securities, and accounts receivable) and excludes inventory since it may take time to sell off and turn into cash. Therefore, inventory is used in the current ratio but not the quick ratio.

Which Account Is Used in the Current Ratio but Not