A Company Has the Following Account Balances A) 91
B)

question 65

Multiple Choice

A company has the following account balances.What is the acid-test ratio? (Please round to two decimal places.) $\begin{array}{|l|r|}\hline\text { Cash } & \$ 60,000 \\\hline \text { Short-terminvestments } & 75,000 \\\hline \text { Net current receivables } & 140,000 \\\hline \text { Inventory } & 145,000 \\\hline \text { Total current liabilities } & 395,000 \\\hline\end{array}$

• A) .91
• B) .94
• C) 1.06
• D) .70

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Definitions:

Base Period

A specific time period used as a standard of comparison for financial or economic data.

Analysis Period

The specific span of time for which financial or operational performance is examined and analyzed.

Comparative Statements

Comparative statements are financial statements that provide data for multiple periods side by side, allowing for easy comparison and analysis of performance over time.

Successive Accounting Periods

Consecutive time frames for which a business or organization reports financial information, usually quarterly or annually.