Generally, the higher the acid-test ratio the easier it is for an organization to pay its current liabilities.

Name: Generally, the higher the acid-test ratio the easier it is for an organization to pay its current liabilities.
Brand: Quizplus
Rating: 4.8 (50 reviews)

Question

Quizplus · Accepted Answer

The acid-test ratio measures an organization's ability to pay its current liabilities using its most liquid assets. Therefore, a higher acid-test ratio indicates a higher availability of liquid assets, which makes it easier for the organization to pay its current liabilities.

Generally, the Higher the Acid-Test Ratio the Easier It Is