If you were given the components of current assets and of current liabilities,what ratio(s)could you compute?
A)Quick ratio
B)Average collection period
C)Current ratio
D)Both A and C
E)All of the above

Question

Quizplus · Accepted Answer

Quick ratio and current ratio can be computed using the components of current assets and current liabilities. Average collection period requires information on accounts receivable and sales, which are not given in this scenario. Therefore, option B is not applicable, leaving us with options A, C, and D. Option E is not correct because we cannot compute the average collection period. Between A, C, and D, the correct answer is D because it includes both A and C, which are the ratios that can be computed with the given information.

If You Were Given the Components of Current Assets and of Current