Data from Sawin Corporation's Most Recent Balance Sheet Appear Below

question 170

Multiple Choice

Data from Sawin Corporation's most recent balance sheet appear below:
The company's acid-test ratio is closest to:

• A) 0.12
• B) 0.39
• C) 0.70
• D) 0.87

---

Definitions:

Note Payable

A written promise to pay a certain amount of money, often with interest, by a specific date, recognized as a liability in the borrower's financial statements.

Consolidated Statement

A financial statement that aggregates the financial position and results of operations of a parent company and its subsidiaries as a single entity.

Push-down Accounting

An accounting method used in situations of acquisitions, where the financial statements of the acquired company are restated to reflect the acquirer's basis of assets and liabilities.

Equity Method

An accounting technique used by firms to assess the profits earned from their investments in other companies, where they own a significant but not controlling interest, typically recognized as 20% to 50% ownership.