8. Compute the acid-test (quick ratio) ratio using the following data: highlyliquid assets cash, AR, ST investmentA)B)C)D)1.151.241.331.86Answer: BCashInventoryAccounts ReceivableCurrent ratio$115,000105,00055,0002.00

Workings:Current ratio = Current assets / Current liabilitiesGiven,Current ratio = 2Current assets =…

8. Compute the acid-test (quick ratio) ratio using the following data: highly liquid assets cash, AR, ST investment A) B) D) 1.15 1.24 1.33 1.86 Cash Inventory Accounts Receivable Current ratio $115,000 105,000 55,000 2.00

8. Compute the acid-test (quick ratio) ratio using the following data: highly liquid assets cash, AR, ST investment A) B) D) 1.15 1.24 1.33 1.86 Cash Inventory Accounts Receivable Current ratio $115,000 105,000 55,000 2.00

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Inventory Accounting

Inventory accounting is that branch of accounting that helps in determining the specific value of assets at different stages of production and development.

Question

8. Compute the acid-test (quick ratio) ratio using the following data: highly
liquid assets cash, AR, ST investment
A)
B)
C)
D)
1.15
1.24
1.33
1.86
Answer: B
Cash
Inventory
Accounts Receivable
Current ratio
$115,000
105,000
55,000
2.00

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