You own a business that has current liabilities of $117,300; cash in the amount $5,600; securities valued at $98,400; and accounts receivable of $85,900. Calculate the acid test ratio. (Round to the nearest hundredth)
A) 1.56:1
B) 1.62:1
C) 1.89:1
D) 2.02:1

Question

Quizplus · Accepted Answer

The acid test ratio is calculated as (Cash + Marketable Securities + Accounts Receivable) / Current Liabilities. Plugging in the given values: ($5,600 + $98,400 + $85,900) / $117,300 = $190,000 / $117,300 = 1.62:1.

You Own a Business That Has Current Liabilities of $117,300;