The Quick Ratio Differs from the Current Ratio in That

question 46

Multiple Choice

The quick ratio differs from the current ratio in that it

• A)represents the amount of cash on hand instead of the total current assets.
• B)excludes inventories and accounts receivable from the numerator of the fraction because of obsolescence and possible collection problems.
• C)is a stricter measure of a company's ability to pay its current obligations.
• D)signals the need to liquidate short-term investments when it drops below 2.0.

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Definitions:

Beck's Cognitive

Beck's Cognitive Therapy, developed by Aaron T. Beck, is a therapeutic approach that identifies and changes negative and dysfunctional thoughts and beliefs to treat psychological disorders.

Psychotherapy

The treatment of mental disorder by psychological rather than medical means.

Research System

An organized set of principles and methodologies utilized for conducting research and generating new knowledge.

Personality Disorders

Mental disorders characterized by enduring maladaptive patterns of behavior, cognition, and inner experience, exhibited across many contexts and deviating from those accepted by the individual's culture.