Multiple Choice
The acid-test ratio differs from the current ratio in that:
A) The acid-test ratio measures profitability and the current ratio does not.
B) The acid-test ratio excludes short-term investments from the calculation.
C) The acid-test ratio is a measure of liquidity but the current ratio is not.
D) Prepaid expenses and inventory are excluded from the calculation of the acid-test ratio.
E) Liabilities are divided by current assets.
Correct Answer:
Verified
Correct Answer:
Verified
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