The current ratio and acid-test ratio differ in:
A) the composition of assets in the ratio denominators.
B) the composition of liabilities in the ratio denominators.
C) that the acid test is more specifc than the current ratio as a test for solvency.
D) the usefulness as a performance measure.

Question

Quizplus · Accepted Answer

The acid test ratio is more specific than the current ratio as a test of short-term solvency.

The Current Ratio and Acid-Test Ratio Differ In