Based on the following data,what is the acid-test ratio,rounded to one decimal point?

A)3.4
B)3.0
C)2.2
D)1.8

Question

Based on the following data,what is the acid-test ratio,rounded to one decimal point?

A)3.4 
B)3.0 
C)2.2 
D)1.8

Quizplus · Accepted Answer

The acid-test ratio is calculated by adding up the cash, accounts receivable, and short-term investments (the quick assets), and then dividing by the current liabilities. 
Quick assets = $70,000 + $20,000 + $30,000 = $120,000
Current liabilities = $35,000
Acid-test ratio = $120,000/$35,000 = 3.43 (rounded to one decimal point)
Therefore, the answer is A) 3.4.

Based on the Following Data,what Is the Acid-Test Ratio,rounded to One