The acid test ratio includes:
A)Current Assets
B)Prepaid Expenses
C)Current Liabilities
D)Inventory
E)All of these

Question

Quizplus · Accepted Answer

The acid test ratio is a liquidity ratio that measures a company's ability to meet its short-term obligations with its most liquid assets. It includes all of the choices given, as they are all considered to be current assets or current liabilities. The formula for the acid test ratio is (current assets - inventory - prepaid expenses) / current liabilities.

The Acid Test Ratio Includes