The Quick Ratio Is Used to Determine an Entity's

question 32

Multiple Choice

The quick ratio is used to determine an entity's:

• A) liquidity.
• B) profitability.
• C) efficiency.
• D) performance.

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Definitions:

Plant Assets

Long-term tangible assets that are used in the production of goods and services, such as machinery, buildings, and equipment.

Depreciation

The process of allocating the cost of a tangible asset over its useful life, reflecting wear and tear, obsolescence, or age.

Notes Receivable

Written promises for amounts to be received, typically including interest, by a debtor to a creditor.

Accounts Receivable

Represents the money owed to a company by its customers for goods or services that have been delivered but not yet paid for.