Which of the Following Is Included in the Denominator of the Acid-Test

question 75

Multiple Choice

Which of the following is included in the denominator of the acid-test ratio?

• A)Total current liabilities less accounts payable
• B)Total liabilities
• C)Total current liabilities
• D)Total current assets

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Definitions:

Exemption Clause

A contract term that limits the liability of one party under certain circumstances, often found in terms and conditions.

Fundamental Breach

A violation of a contract that is so severe it permits the aggrieved party to terminate the agreement and possibly seek damages.

Minor Aspect

A less significant or minor detail or element of a larger issue or subject.

Anticipatory Breach

Occurs when one party to a contract indicates they will not fulfill their contractual obligations before the due time.