The Numerator of the Acid-Test Ratio Consists of

question 43

Multiple Choice

The numerator of the acid-test ratio consists of

• A)total current assets.
• B)cash and marketable securities.
• C)cash and net receivables.
• D)cash, marketable securities, and net receivables.

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Definitions:

Variable Costs

Charges that adjust in relation to the quantity of goods or services manufactured by a corporation.

Fixed Costs

Expenses that do not change in response to the level of goods or services produced by the business, such as rent, salaries, and insurance.

Composite Unit

A measurement or quantity combining two or more units to represent a product or system's multiple aspects.

Contribution Margin

The difference between the sales revenue and variable costs of a product, indicating how much contributes to covering fixed costs and earning profit.