Which of the Following Is True of the Acid-Test Ratio

question 132

Multiple Choice

Which of the following is true of the acid-test ratio?

• A)It measures a company's ability to pay its current liabilities.
• B)It measures the ability of the company to earn net income.
• C)It measures a company's ability to meet its short-term obligations with cash and cash equivalents.
• D)It indicates how much cash could be realized by selling the inventory.

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