The acid-test ratio
A) Is also called the quick ratio
B) Measures profitability
C) Measures liquidity
D) Is also called the quick ratio and measures liquidity
E) All of the above

Question

Quizplus · Accepted Answer

The acid-test ratio is also called the quick ratio and measures liquidity. Option A is correct, and B is incorrect as it measures liquidity and not profitability. Option C is incorrect as it only measures liquidity and not profitability. So, option D is the best choice. Option E is incorrect because it includes option B, which is incorrect.

The Acid-Test Ratio