An Acid Test (Quick) Ratio of 0

question 33

Multiple Choice

An acid test (quick) ratio of 0.75 to 1 would indicate:

• A) a ratio that would not allow a company to pay off all current liabilities with quick assets.
• B) for every $0.75 of short-term debt there is $1.00 of quick assets to meet short-term obligations.
• C) for every $1 of current assets there is $0.75 of short-term debt.
• D) Both A and B are correct.

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Definitions:

Kohlberg's Principles

A theory of moral development proposed by Lawrence Kohlberg, describing how individuals evolve their understanding of morality through different stages.

Universal

Pertaining to or affecting all members of a class or category without exception; applicable everywhere or in all cases.

Instrumental Purpose

The use of rational calculation to achieve individual goals, often highlighted in moral development or decision-making scenarios.

Kohlberg's Stage

Refers to one of the stages in Lawrence Kohlberg's theory of moral development, detailing the progression of moral reasoning from childhood through adulthood.