A Company with a Quick Ratio of 1

question 94

Multiple Choice

A company with a quick ratio of 1.90 means that the company:

• A)has $1.00 in quick assets for every $1.90 in current liabilities.
• B)has $1.90 in quick assets for every $1.00 in current liabilities.
• C)could not pay off all of its current liabilities using quick assets.
• D)would have to use inventory to help pay off its current liabilities.

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Definitions:

Arousal Theory

A theory in psychology that suggests that people are motivated to maintain an optimal level of arousal, which can vary from one person to another.

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Homeostasis

The process by which biological systems maintain stability and equilibrium while adjusting to conditions that are optimal for survival.

Incentive

A thing that motivates or encourages someone to do something, often used in contexts of economics, psychology, and behavior management.