Which Financial Ratio Measures the Extent to Which the Company's

question 13

Multiple Choice

Which financial ratio measures the extent to which the company's capital is in cash or cash equivalents?

• A) quick ratio
• B) current ratio
• C) cash ratio
• D) strategic ratio
• E) inventory ratio

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Definitions:

Accrued Receivables

Amounts owed to a business for goods or services delivered but not yet paid by the end of an accounting period.

Income Summary Account

An account used in closing to collect revenues and expenses, the balance of which shows the net income or loss for the period.

Debit Balance

A debit balance is an accounting entry that occurs on the left side of the ledger and indicates the amount of money owed or an increase in assets or expenses.

Net Income

The total profit of a company after all expenses and taxes have been deducted from revenues, indicating the company's profitability.