The Numerator of the Acid-Test Ratio Consists of

question 52

Multiple Choice

The numerator of the acid-test ratio consists of

• A)total current assets.
• B)cash and short-term investments.
• C)cash and net receivables.
• D)cash, short-term investments, and net receivables.

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Definitions:

Partners' Investments

The capital contributed by partners into a partnership for its operation and growth.

Owners' Equity

Owners' equity, similar to stockholders' equity, is the proportion of a company's total value that belongs to its owners or shareholders, reflecting the net assets after liabilities have been deducted.

Accounts Receivable

Funds that a business is due to receive from its clients for products supplied or services rendered, but which have not been paid for yet.

Capital Balances

The amount of money that owners have invested in a company, plus any retained earnings or minus any losses.