When calculating the quick ratio,________ is included in the numerator.
A)inventory
B)prepaid insurance
C)supplies
D)short-term marketable securities

Question

Quizplus · Accepted Answer

The quick ratio is a liquidity ratio that measures a company's ability to meet its short-term obligations with its most liquid assets. The numerator of the quick ratio includes only quick assets, which are cash, short-term marketable securities, and accounts receivable. Inventory, prepaid insurance, and supplies are not included in the numerator because they are not considered as liquid as quick assets. Therefore, the best choice for the quick ratio's numerator is D, short-term marketable securities.

When Calculating the Quick Ratio,________ Is Included in the Numerator