The acid-test ratio is
A)Current assets divided by current liabilities.
B)Cash and short-term investments divided by current liabilities.
C)Cash,short-term investments,and accounts receivable divided by current liabilities.
D)Cash,short-term investments,accounts receivable,and inventory divided by current liabilities.

Question

Quizplus · Accepted Answer

The acid-test ratio, also known as the quick ratio, measures a company's ability to pay off its current liabilities without relying on the sale of inventory. It includes cash, short-term investments, and accounts receivable divided by current liabilities.

The Acid-Test Ratio Is