The Quick Ratio Differs from the Current Ratio in That

question 96

Multiple Choice

The quick ratio differs from the current ratio in that it

• A) represents the amount of cash on hand instead of the amount of working capital.
• B) is a stricter test of a company's ability to pay its current debts as they are due.
• C) excludes inventories and accounts receivable from the numerator of the fraction because of obsolescence and possible default on payment.
• D) is more difficult to calculate.

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Definitions:

Citric Acid Cycle

A sequence of biochemical processes undergone by every organism that uses oxygen to produce energy by oxidizing acetate, which comes from carbohydrates, fats, and proteins.

Acetyl CoA

A central molecule in metabolism, used in biochemical reactions for energy production and synthesis of fatty acids.

Aerobic Respiration

The process of producing cellular energy involving oxygen. Cells break down food in the mitochondria in a long, multistep process that produces roughly 36 ATP.

Nitrate

A compound containing nitrogen and oxygen (NO3-) that is a vital plant nutrient and can also be found in water supplies, where high levels can be harmful to health.