How Do You Determine the Acid-Test Ratio

question 48

Multiple Choice

How do you determine the acid-test ratio?

• A) The sum of cash and short-term investments divided by short-term debt.
• B) Current assets divided by current liabilities.
• C) Current assets divided by short-term debt.
• D) The sum of cash, short-term investments and net receivables divided by current liabilities.

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Definitions:

Life Estate

A legal arrangement where an individual is granted the rights to use and benefit from property for the duration of their life.

Building Certain Structures

Regulations or permissions required for the construction or modification of buildings or other structures to ensure compliance with local codes and standards.

Title

The legal right to own, possess, use, control, and dispose of property or assets.

Real Property

Land and any permanent structures or improvements attached to it, such as buildings and houses, legally recognized as immovable.