A company has $56,000 in cash,$12,000 in accounts receivable,$25,000 in temporary investments and $100,000 in merchandise inventory.The company has $60,000 in current liabilities.The company's acid test (quick)ratio is:
A)3.217.
B)1.550.
C)1.133.
D)0.933.

Question

Quizplus · Accepted Answer

1.550.The acid test (quick) ratio is calculated by dividing the sum of cash, accounts receivable, and temporary investments by current liabilities. So, ($56,000 + $12,000 + $25,000) / $60,000 = $93,000 / $60,000 = 1.550.

A Company Has $56,000 in Cash,$12,000 in Accounts Receivable,$25,000 in Temporary