Which of the Following Is Included in the Denominator of the Acid-Test

question 96

Multiple Choice

Which of the following is included in the denominator of the acid-test ratio?

• A) All current liabilities except accounts payable
• B) Total liabilities
• C) Total current liabilities
• D) Total current assets

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Definitions:

FICA - Medicare

Part of the Federal Insurance Contributions Act taxes, specifically aimed at funding Medicare, a healthcare program for the elderly and certain disabled individuals in the United States.

Withheld

Refers to a portion of an individual's earnings or payments that is not provided to them but is instead held back, often for tax purposes.

Matched by Employer

Pertains to contributions or payments, typically toward FICA taxes or retirement funds, that an employer duplicates for an employee.

Contingent Liability

A potential financial obligation that may occur or become payable in the future, depending on the outcome of a specific event.