What Is the Reason for Computing the Acid Test Ratio

question 104

Multiple Choice

What is the reason for computing the acid test ratio in addition to the current ratio?

• A) inventory is the most liquid of the liquid assets.
• B) a firm's inventory may not be particularly liquid.
• C) inventory is the best collateral for short term loans.
• D) compared to accounts receivable, inventory balances may be difficult to verify

Identify the challenges and strategies related to workforce diversity and labor supply forecasts.

Recognize the significance of skills, especially technical and interpersonal skills, in the contemporary labor market.

Understand the concept and components of high-performance work systems.

Recognize the importance of employee empowerment in organizational success.

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Definitions:

Posting

The process of transferring the debits and credits from the journal entries to the accounts.

Debit

An entry recorded on the left side of an account ledger, signifying an increase in assets or expenses or a decrease in liabilities, equity, or income.

Unearned Revenue

The liability created by receiving revenue in advance.

Capital Account

A financial statement account that represents the ownership interests or equity in a company.