Multiple Choice
Which of the following is false regarding the current ratio compared to the acid test ratio?
A) The current ratio is less strict and more general.
B) The acid test ratio measures the firm's ability to pay its debts over a shorter period of time.
C) Both ratios use asset accounts, but the acid test ratio does not use inventories.
D) Both ratios exclude prepaid expenses in the numerator.
Correct Answer:
Verified
Correct Answer:
Verified
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