Cash,short-term investments and net current receivables are all components of the numerator of the acid-test ratio.

Question

Quizplus · Accepted Answer

The acid-test ratio, also known as the quick ratio, measures a company's ability to pay its current liabilities with its highly liquid assets, excluding inventory. The numerator of the acid-test ratio includes cash, short-term investments, and net current receivables, making the statement true.

Cash,short-Term Investments and Net Current Receivables Are All Components of the Numerator