The Rough "Rule of Thumb" for a Quick Ratio Is

question 22

Multiple Choice

The rough "rule of thumb" for a quick ratio is that the ratio should be about

• A) 2 to 1.
• B) 1 to 1.
• C) .1 to 1.
• D) 1 to .1.

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Definitions:

Legally Sufficient Value

Refers to the consideration in a contract that is recognized by law as adequate to support a legal obligation or agreement.

Preexisting Duty

An obligation that one party is already legally required to perform and cannot be used as consideration for a new contract.

Consideration

In contract law, consideration refers to something of value exchanged between parties as part of an agreement.

Preexisting Duty

A duty that already exists under contract law, which cannot be used as consideration for a new promise or contract.