If current assets were $150,000, merchandise inventory was $55,000, and current liabilities were $15,000, the acid test ratio is: (Round your answer two decimal places.)
A) 6.33:1.
B) 10.00:1.
C) 1.73:1.
D) 1:1.73.

Question

Quizplus · Accepted Answer

The acid-test ratio is calculated as (Current Assets - Inventory) / Current Liabilities. Here, it is ($150,000 - $55,000) / $15,000 = $95,000 / $15,000 = 6.33:1.

If Current Assets Were $150,000, Merchandise Inventory Was $55,000, and Current