The Acid Test Ratio Does Not Include

question 10

Multiple Choice

The acid test ratio does not include:

• A) Cash
• B) Accounts receivable
• C) Supplies
• D) Inventory
• E) None of these

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Definitions:

Tax Withholding

The portion of an employee's wages that is not included in their paycheck because it is sent directly to the federal, state, or local tax authorities as partial payment of income tax.

FICA Taxes

Taxes collected under the Federal Insurance Contributions Act to fund Social Security and Medicare, required deductions from workers' paychecks.

Schedule H

Schedule H is a tax form used by household employers to report wages paid to household employees, such as nannies or housekeepers, and calculate Social Security, Medicare, and FUTA taxes.

Household Worker

An employee who performs domestic services in a private home, such as a nanny, maid, or gardener.