Which of the following is included in the computation of the quick ratio?
A)Prepaid rent
B)Accounts receivable
C)Inventory
D)Supplies

Question

Quizplus · Accepted Answer

The quick ratio, also known as the acid-test ratio, is a measure of a company's ability to pay off its current liabilities quickly. The formula for the quick ratio is (Current assets - Inventory - Prepaid expenses) / Current liabilities. Therefore, the only choice included in the computation of the quick ratio is accounts receivable. Prepaid rent, inventory, and supplies are excluded from the calculation.

Which of the Following Is Included in the Computation of the Quick