March Company's acid-test (quick)ratio at the end of 20 × 6 was closest to:
A) 0.39 to 1.
B) 0.53 to 1.
C) 0.95 to 1.
D) 1.90 to 1.

Question

Quizplus · Accepted Answer

The acid-test ratio is calculated by dividing the sum of cash, marketable securities, and accounts receivable by current liabilities. Without specific figures, the closest ratio provided is 0.95 to 1, which suggests that March Company has nearly enough liquid assets to cover its current liabilities.

March Company's Acid-Test (Quick)ratio at the End of 20 ×