Which of the Following Current Assets Is Excluded When Calculating

question 62

Multiple Choice

Which of the following current assets is excluded when calculating the acid-test ratio?

• A)Prepaid assets
• B)Inventory
• C)Accounts receivable
• D)Both A and B

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Definitions:

Mortgage Bond

A bond secured by a mortgage on a property, where the bondholders have a claim on the property in case of default.

Real Estate

Property consisting of land and the buildings on it, along with its natural resources such as crops, minerals, or water; immovable property of this nature.

Coupon Bond

A bond that offers interest payments to its holder through coupons attached to the bond, redeemable at specified intervals before the bond's maturity date.

Zero Coupon Bond

A bond that is issued at a discount to its face value and pays no interest before maturity, when its full face value is repaid.