Jones Corp.reported current assets of $193,000 and current liabilities of $137,000 on its most recent balance sheet.The current assets consisted of $62,000 Cash;$43,000 Accounts Receivable;and $88,000 of Inventory.The acid-test (quick)ratio is:
A)1.4:1.
B)0.77:1.
C)0.54:1.
D)1:1.
E)0.64:1.

Question

Quizplus · Accepted Answer

The acid-test (quick) ratio is calculated as (Cash + Accounts Receivable) / Current Liabilities. Substituting the given values, we get ($62,000 + $43,000) / $137,000 = $105,000 / $137,000 = 0.77:1. Therefore, the best choice is B.