The Acid-Test Ratio

question 42

Multiple Choice

The acid-test ratio

• A) is a quick calculation of an approximation of the current ratio.
• B) does not include all current liabilities in the calculation.
• C) does not include inventory as part of the numerator.
• D) does include prepaid expenses as part of the numerator.

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Definitions:

Multiple Goals

The presence of more than one objective that an individual or organization aims to achieve.

Tenuous

Describes something that is very weak, slight, or uncertain; having little substance or significance.

Threatened

Feeling endangered or at risk, either physically, emotionally, or psychologically, often leading to defensive or protective actions.

Actual Noise

This refers to real, tangible disturbances in the environment that can interfere with the transmission and reception of a message.