Which of the following is excluded when calculating quick ratio?
A) accounts receivable
B) accounts payable
C) cash
D) inventory

Question

Quizplus · Accepted Answer

Quick ratio excludes inventory because it is less liquid and may take longer to convert to cash in case of a financial emergency. Quick ratio is calculated by subtracting inventory from current assets and dividing the result by current liabilities. Therefore, inventory is not included in the calculation. Accounts receivable, accounts payable, and cash are included in the calculation.

Which of the Following Is Excluded When Calculating Quick Ratio