Because the assets included in the current ratio have different levels of liquidity that reflect different degrees of collectability,many companies use which of the following ratios to measure current liquidity?
A)Current ratio.
B)Acid-test.
C)Working capital.
D)None of these ans choices are correct.

Question

Quizplus · Accepted Answer

The acid-test ratio (also known as the quick ratio) only includes the most liquid assets, such as cash, marketable securities, and accounts receivable (after deducting the allowance for doubtful accounts). This ratio provides a more conservative measure of a company's ability to meet its short-term obligations, as it excludes less liquid assets such as inventory.

Because the Assets Included in the Current Ratio Have Different