The Acid-Test Ratio Is Also Called The

question 14

Multiple Choice

The acid-test ratio is also called the:

• A)current ratio
• B)cash ratio
• C)times interest earned ratio
• D)quick ratio
• E)return on equity ratio

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Definitions:

Debt Repayments

The process of paying back borrowed money, typically including both the principal amount lent and any accrued interest.

Operating Activities

Activities directly related to the core business functions of producing and delivering goods and services, which influence the cash flow from operations on a company's cash flow statement, highlighted by a secondary explanation emphasizing its financial impact.

Net Income

The amount of revenue that remains after subtracting all expenses, taxes, and costs from total revenue.

Nonoperating Items

Financial gains or losses arising from activities not related to a company's core business operations.