Which of the Following Current Assets Is NOT Included When

question 62

Multiple Choice

Which of the following current assets is NOT included when calculating the acid-test ratio?

• A)Inventory
• B)Marketable securities
• C)Cash
• D)Accounts receivable

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Definitions:

Warranty Expense

Costs recognized by a company in accordance with its policy to repair or replace defective products during a warranty period.

Matching Concept

The Matching Concept in accounting states that expenses should be matched with the revenues that they helped to generate, in the same reporting period.

Uninsured Risk

Risk that has not been covered by an insurance policy, leaving the individual or business exposed to potential financial loss.

Indebtedness Guarantees

Commitments made by one party to assume responsibility for the debt obligation of another party if that party fails to make payment.