The Acid-Test Ratio Appears in the Current Assets Section of the Balance

question 15

True/False

The acid-test ratio appears in the current assets section of the balance sheet.

---

Definitions:

Creditors

Entities or organizations that provide loans or offer credit facilities to people.

Liabilities

Liabilities are financial obligations or debts that a company owes to others, which are expected to be settled in the future through the transfer of assets, provision of services, or other economic benefits.

Owner's Equity

The residual interest in the assets of the enterprise after deducting liabilities, representing the capital owned by the proprietors.

Asset

An economic resource owned or controlled by a person or company, expected to provide future benefits.