The following selected information relates to Candle Company for the past two years. What is the acid-test ratio for the current year?
A)0)39
B)0)57
C)0)77
D)1)30

Question

The following selected information relates to Candle Company for the past two years.  What is the acid-test ratio for the current year?
A)0)39 
B)0)57 
C)0)77 
D)1)30

Quizplus · Accepted Answer

To calculate the acid-test ratio, we use the formula (Cash + Marketable Securities + Accounts Receivable) / Current Liabilities. Given the information for the current year, the calculation would be (150,000 + 50,000 + 120,000) / 300,000 = 0.77. Therefore, the answer is C.

The Following Selected Information Relates to Candle Company for the Past