Which One of the Following Is Not True of the Acid

Multiple Choice

Which one of the following is not true of the acid test ratio?

A) It is a measure of the very short-term liquidity of a business.
B) You would expect the acid test ratio of a cash business to be lower than that for a credit business.
C) The acid test ratio will always be greater than the current ratio.
D) The higher the acid test ratio, the better the liquidity of the business.