Which of the following is not true regarding the quick ratio?
A)If a company has more current assets than liquid assets,the current ratio will be larger than the quick ratio.
B)A high quick ratio suggests a high ability to pay current liabilities.
C)Liquid assets include cash and cash equivalents,short-term investments,and net accounts receivable.
D)A quick ratio greater than 1 implies a company could not pay all of its current liabilities.

Question

Quizplus · Accepted Answer

A quick ratio greater than 1 implies that a company has more liquid assets than current liabilities, indicating a high ability to pay off short-term obligations. Therefore, it is not true that a quick ratio greater than 1 implies a company could not pay all of its current liabilities.

Which of the Following Is Not True Regarding the Quick