Which of the Following Would NOT Be Included in the Numerator

question 97

Multiple Choice

Which of the following would NOT be included in the numerator of the acid-test ratio?

• A)Accounts receivable
• B)Cash-equivalents
• C)Inventories
• D)Short-term investments

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Definitions:

Short-Term Debt

Short-Term Debt is borrowed money that a company must repay within the short term, typically within a year, often used for operational expenses.

Interest Rate Fluctuations

Changes in the interest rate over time, affecting borrowing costs, savings rates, and investment returns.

Refund Risk

The risk that a debt issuer will repay borrowed funds before the maturity date, typically in a declining interest rate environment.

Working Capital Policy

A strategic approach to managing a company's short-term assets and liabilities to ensure it has sufficient liquidity to meet its short-term obligations.