The acid-test ratio is a more stringent measure of liquidity than the cash ratio.

Name: The acid-test ratio is a more stringent measure of liquidity than the cash ratio.
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Quizplus · Accepted Answer

The cash ratio is more stringent than the acid-test ratio because it considers only cash and cash equivalents as assets that can cover current liabilities, whereas the acid-test ratio includes accounts receivable and other quick assets in addition to cash and cash equivalents.

The Acid-Test Ratio Is a More Stringent Measure of Liquidity