When Compared to the Current Ratio,the Quick Ratio Is a Less

question 40

True/False

When compared to the current ratio,the quick ratio is a less stringent measure of a company's ability to pay its current liabilities.

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Definitions:

Statement Of Cash Flows

A financial report that shows how changes in balance sheet accounts and income affect cash and cash equivalents, breaking the analysis down to operating, investing, and financing activities.

Indirect Method

A technique used in cash flow statements where net income is adjusted for non-cash transactions and changes in working capital to arrive at cash flow from operating activities.

Cash Dividend

A payment made by a company out of its earnings to shareholders, usually in the form of cash.

Indirect Method

This method is utilized in financial accounting to calculate cash flows from operating activities by starting with net income and adjusting for changes in balance sheet accounts.