Discussion
The quick or acid test ratio differs from the current ratio in excluding
Answer: D
Correct answer: inventory from the numerator
Inventory is the least liquid of the current assets: it must be sold before it becomes a receivable and collected before it becomes cash, and in a difficulty it may not sell at all. Removing it gives a stricter test, which is why the quick ratio matters most for a business carrying slow-moving stock.
No comment is present. Be the first to comment.
Loading…
Post your comment
Please log in or register to post a comment.
Examination Categories
- SSC Exams
- Banking Exams
- Teaching Exams
- Civil Services Exams
- Railways Exams
- Engineering Recruitment Exams
- Defence Exams
- State Government Exams
- Police Exams
- Insurance Exams
- Nursing Exams
- Other Government Exams
- NRA CET
- PG Entrance Exams
- Campus Placement
- MBA Entrance Exams
- CUET and UG Entrance
- Judiciary Exams
- Regulatory Body Exams
- Software Development