Annie's Attic Reported the Following Information for September 30 Instructions: (1) Explain the Purpose of the Quick Ratio

question 100

Essay

Annie's Attic reported the following information for September 30.
$$\begin{array}{l}\begin{array} { | l | r | } \hline \text { Cash }&\$23,000\\\hline \text { Accounts receivable } & 53,200 \\\hline \text { Merchardise invertory } & 220,000 \\\hline \text { Prepaid experse } & 13,200 \\\hline \text { Accounts payable } & 83,000 \\\hline \text { Balaries payable } & 12,000 \\\hline \text { Other current payables } & 1,500 \\\hline\end{array}\end{array}$$ Instructions: (1) Explain the purpose of the quick ratio. (2) Calculate the quick ratio to two decimals. (3) What does the quick ratio reveal about Annie's Attic?

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Definitions:

Outlook on Life

An individual's general attitude or viewpoint towards life and the future.

Depressed Individuals

People who are experiencing depression, characterized by persistent feelings of sadness, hopelessness, and a lack of interest or pleasure in activities.

Reasonable Certainty

A standard requiring sufficient specificity in the details of an agreement or fact to enable enforcement or determination by a court.

Breach of Contract

The inability to fulfill any condition of an agreement, whether documented or verbal, without a valid legal reason.