Which of the Following Are Components of the Quick Ratio

question 53

Multiple Choice

Which of the following are components of the quick ratio?

• A)Cash and prepaid insurance
• B)Cash and accounts receivable
• C)Accounts receivable and inventory
• D)All current assets except accounts receivable

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Definitions:

Ending Inventory

Ending inventory is the total value of goods available for sale at the end of an accounting period, calculated by adding new purchases to beginning inventory and subtracting cost of goods sold.

Periodic LIFO

An inventory valuation method where the last items placed in inventory are the first ones counted as sold, calculated at the end of an accounting period.

Cost of Goods Sold

Represents the direct costs attributable to the production of the goods sold by a company.

Ending Inventory

Ending inventory is the total value of all products, raw materials, and finished goods that are not sold at the end of an accounting period.