Which Statement Below Best Describes the Quick (Acid Test)ratio

question 99

Multiple Choice

Which statement below best describes the quick (acid test) ratio?

• A)The acid test ratio considers only the most liquid assets: cash,accounts receivable,and temporary investments.
• B)The current ratio includes only the assets most easily converted into cash.
• C)The acid test adds merchandise inventory and prepaid expenses in the computation of current assets.
• D)None of these answers are correct.

Apply strategies for crafting messages with positive emphasis to enhance reader engagement and response.

Recognize the importance of tone and politeness levels in professional communication.

Understand the role of positive emphasis in organizational success and employee motivation.

Distinguish between direct and indirect requests and the appropriate contexts for each.

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Definitions:

Short-Run Average Total Cost (ATC)

The total cost per unit of output in the short run, where some factors of production are fixed.

Profit-Maximizing Level

The output level at which a firm achieves the highest profit, where marginal revenue equals marginal cost.

Average Total Costs (ATC)

A rephrasing of Average Total Cost, it calculates the per-unit production cost by dividing the total cost by the total quantity of goods produced.

Manufacturing Firm

A business that uses components, parts, or raw materials to make a finished good.