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:

Unilateral Contract

A contract where only one party makes a promise or undertakes a performance without requiring a reciprocal agreement from the other party.

Consideration

In contract law, consideration refers to something of value exchanged between parties, forming the basis for a contract.

Promissory Estoppel

A rule in law that prohibits an individual from retracting a pledge given to another if the latter has justifiably depended on this assurance to their harm.

Quasi Estoppel

A legal doctrine preventing a party from asserting rights or facts that contradict their past actions or statements.