The Acid-Test (Quick) Ratio

question 14

Multiple Choice

The acid-test (quick) ratio

• A) is used to quickly determine a company's solvency and long-term debt paying ability.
• B) relates cash short-term investments and net receivables to current liabilities.
• C) is calculated by taking one item from the income statement and one item from the balance sheet.
• D) is the same as the current ratio except it is rounded to the nearest whole percent.

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Definitions:

World's Land Area

Refers to the total surface area of the Earth that is covered by land.

Forested

Describes an area covered with forests or having a large amount of tree cover.

Percentage

A way of expressing a number as a fraction of 100, used to compare proportions.

Land

In addition to the part of the earth’s surface not covered by water, this term refers to any and all natural resources (“free gifts of nature”) that are used to produce goods and services. Thus, it includes the oceans, sunshine, coal deposits, forests, the electromagnetic spectrum, and fisheries. Note that land is one of the four economic resources.