Curry Company's acid-test (quick)ratio at December 31,20× 7 was closest to:
A) 1.5 to 1.
B) 1.6 to 1.
C) 2.0 to 1.
D) 2.1 to 1.

Question

Quizplus · Accepted Answer

The acid-test ratio is calculated by dividing quick assets (cash, marketable securities, and receivables) by current liabilities. The ratio of 1.5 to 1 indicates that Curry Company has $1.50 in quick assets for every $1 of current liabilities, which is a common benchmark for a healthy quick ratio.

Curry Company's Acid-Test (Quick)ratio at December 31,20× 7 Was Closest