The quick ratio is sometimes referred to as the ________.
A)acid test
B)current ratio
C)profitability test
D)leverage ratio

Question

Quizplus · Accepted Answer

The quick ratio is referred to as the acid test because it measures a company's ability to pay off its short-term debts without relying on the sale of inventory. It does this by excluding inventory from the calculation and focusing only on the company's most liquid assets.

The Quick Ratio Is Sometimes Referred to as the ________