The basic difference between the quick ratio and the current ratio is that the _____.
A)quick ratio measures liquidity while the current ratio measures profitability
B)current ratio test is a more difficult one
C)current ratio includes inventories and marketable securities
D)current ratio measures only the most liquid assets

Question

Quizplus · Accepted Answer

The current ratio includes inventories and marketable securities, while the quick ratio only includes the most liquid assets. The current ratio provides a broader measure of liquidity than the quick ratio. Neither ratio measures profitability. The current ratio test does not exist as a separate concept.

The Basic Difference Between the Quick Ratio and the Current