Merchandise inventory is NOT counted when computing the acid-test ratio.

Name: Merchandise inventory is NOT counted when computing the acid-test ratio.
Brand: Quizplus
Rating: 4.7 (34 reviews)

Question

Quizplus · Accepted Answer

Merchandise inventory is not included in the calculation of the acid-test ratio because it is not considered a highly liquid asset that can be easily converted to cash. The acid-test ratio only includes assets that are highly liquid, such as cash, accounts receivable, and short-term investments.

Merchandise Inventory Is NOT Counted When Computing the Acid-Test Ratio