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.

Question

Quizplus · Accepted Answer

The acid-test ratio, also known as the quick ratio, measures a company's ability to meet its short-term obligations with its most liquid assets. It includes cash, short-term investments, and accounts receivable divided by current liabilities, making option C correct.

The Acid-Test Ratio Is