When Computing the Acid-Test Ratio,the Numerator Will Include All of the Following

question 58

Multiple Choice

When computing the acid-test ratio,the numerator will include all of the following EXCEPT for:

• A)net current receivables.
• B)short-term investments.
• C)inventory.
• D)cash and cash equivalents.

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Definitions:

Dividends

Disbursements from a corporation to its shareholders, typically derived from its profits.

Double-entry Accounting

An accounting method that records each transaction twice, as both a debit and a credit, to maintain the balance of the accounting equation.

Debit Account Balances

Balances that appear on the left side of the ledger, indicating resources or expenses.

Credit Account Balances

The amount owed by a borrower on a credit account, reflecting any purchases, payments, charges, or adjustments.