What is the acid-test ratio for a merchant with the following account balances? (Round your answer to two decimal places.) $$\begin{array} { | l | l | }
\hline \text { Cash } & \$ 21,000 \
\hline \text { Short-term investments } & 44,000 \
\hline \text { Net current receivables } & 54,000 \
\hline \text { Merchandise inventory } & 21,000 \
\hline \text { Total current liabilities } & 275,000 \
\hline
\end{array}$$
A) 0.76
B) 0.43
C) 0.60
D) 0.83

Question

What is the acid-test ratio for a merchant with the following account balances? (Round your answer to two decimal places.) $$\begin{array} { | l | l | } 
\hline \text { Cash } & \$ 21,000 \
\hline \text { Short-term investments } & 44,000 \
\hline \text { Net current receivables } & 54,000 \
\hline \text { Merchandise inventory } & 21,000 \
\hline \text { Total current liabilities } & 275,000 \
\hline
\end{array}$$
A) 0.76
B) 0.43
C) 0.60
D) 0.83

Quizplus · Accepted Answer

The acid-test ratio is calculated as (Cash + Short-term investments + Net current receivables) / Total current liabilities = (21,000 + 44,000 + 54,000) / 275,000 = 119,000 / 275,000 = 0.4327, which rounds to 0.43.

What Is the Acid-Test Ratio for a Merchant with the Following