Which of the Following Is the Most Desirable Quick Ratio

question 78

Multiple Choice

Which of the following is the most desirable quick ratio?

• A) 1.20
• B) 1.00
• C) 0.95
• D) 0.50

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Definitions:

Proprietorship

A proprietorship, also known as a sole proprietorship, is a type of business that is owned and run by one individual and where there is no legal distinction between the owner and the business entity.

Liabilities

Liabilities are financial obligations or debts that a company owes to others, to be settled over time through the transfer of economic benefits including money, goods, or services.

Owner's Equity

The total value that the owners or shareholders have invested in a company minus any liabilities.

Balance Sheet

A financial statement that shows a company's financial position at a specific point in time by detailing assets, liabilities, and owner's equity.