Which of the Following Two Items Is NOT Included in the Calculation

question 47

Multiple Choice

Which of the following two items is NOT included in the calculation of the numerator in the acid- test ratio?

• A)Short-term investments and net current receivables
• B)Inventory and net current receivables
• C)Prepaid expenses and inventory
• D)Cash and prepaid expenses

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Definitions:

Credit Period

The time duration given by a seller to a buyer to pay for a product or service, typically expressed in days.

Inventory Period

The average time that goods remain in inventory before being sold, indicating the efficiency of inventory management.

War On Terrorism

A global military campaign launched by the United States and allied countries to combat terrorism, especially in response to the September 11 attacks.