When calculating the denominator for the quick ratio,you would NOT include:
A)accounts payable.
B)long-term debt.
C)salaries payable.
D)current maturities of long-term debt.

Question

Quizplus · Accepted Answer

The quick ratio, also known as the acid-test ratio, is a measure of a company's ability to meet its short-term obligations using its most liquid assets. To calculate the quick ratio, you subtract inventories and prepaid expenses from current assets and divide the result by current liabilities. Long-term debt is not part of current liabilities, so it should not be included in the denominator for the quick ratio. Therefore, B is the correct answer as it involves long-term debt.

When Calculating the Denominator for the Quick Ratio,you Would NOT