The Most Important Difference Between the 'Quick' and 'Current' Ratios

question 94

Multiple Choice

The most important difference between the 'quick' and 'current' ratios in assessing an entity's short-term debt-paying ability is the inclusion of:

• A) cash at bank in one and not the other.
• B) inventory in one and not the other.
• C) current receivables in one and not the other.
• D) prepayments in one and not the other.

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Definitions:

Consumers

Individuals or entities that purchase goods or services for personal use rather than for manufacturing or resale.

Substitute

A good or service that can be used in place of another, offering consumers a choice when making purchase decisions.

Input

Resources used in the production process of goods or services, including labor, materials, and capital.

Removing Subsidy

The process of eliminating financial support provided by governments to businesses, individuals, or other government departments.