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:

Learning Organization

An organization that prioritizes the continuous learning and development of its members to adapt and innovate.

Open-System Model

A business or organizational approach that focuses on external interactions, recognizing the dynamic exchange between the organization and its environment.

Organizational Life Cycle

The progression through which an organization evolves over time, typically consisting of stages such as startup, growth, maturity, and decline.

Equifinality

The concept that in open systems, a given end state can be reached by many potential means, indicating multiple paths to achieve the same goal.