Which of the Following Two Ratios Measure the Short-Term Solvency

question 62

Multiple Choice

Which of the following two ratios measure the short-term solvency of a company?

• A)Current Ratio and Times Interest Earned
• B)Quick Ratio and Current Ratio
• C)Quick Ratio and Accounts Receivable Turnover
• D)Accounts Payable Turnover and Inventory Turnover

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Definitions:

Dollar Amount

The total monetary value or cost expressed in units of currency, often used to specify prices, costs, and financial transactions.

Base Compensation

The initial salary or wage provided to an employee not including benefits, bonuses, or any form of variable compensation.

Fringe Benefits Programs

Employer-provided supplementary benefits that accompany direct wages or salaries, such as health insurance, retirement plans, and paid vacations.

Organization

A structured group of people working together to achieve a collective goal or purpose.