If stock is removed from the analysis when calculating the acid test ratio, why isnt the figure

Question:

If stock is removed from the analysis when calculating the acid test ratio, why isn’t the figure for debtors also removed? Debtors can be just as difficult to turn into cash.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Frank Woods Business Accounting Volume 2

ISBN: 9780273693109

10th Edition

Authors: Frank Wood, Alan Sangster

See More Books

Question Posted: Sep 10, 2023 06:05 AM

See More Questions

Planning is one of the most important management functions in any business. A front office managers first step in planning should involve determine the departments goals. Planning also includes...
Established in 1980, Pizza Station is located in the trendy downtown area of Salina, Pennsylvania. Situated within walking distance of Salina State College, the restaurant initially offered in-house...
The Crazy Eddie fraud may appear smaller and gentler than the massive billion-dollar frauds exposed in recent times, such as Bernie Madoffs Ponzi scheme, frauds in the subprime mortgage market, the...
Problem 1: The three velocities shown would indicate that the body is not rigid. Given that the body is known to be rigid, one of the three velocities is clearly incorrect. Draw all lines and take...
If the required reserve ratio is 10 percent, calculate the potential change in demand deposits under the following circumstances: a. You take $5,000 from under your mattress and deposit it in your...
Discuss the significance of field of experience in communication. LO6
What is odd-even pricing?
Kiel Centers sales are all made on account. The firms collection experience has been that 35% of a months sales are collected in the month the sale is made, 55% are collected in the month following...
HW Score 5 of 15 (4 complete) 6-39B (similar to) Glass repairs chips in car windshields. The company incurred the following operating costs for the month of March 2018: Click the icon to view the...
Reconsider Problem 9.3. Suppose now that the demand at each of the destinations has been reduced by 10, so that the new demands are 20, 30, and 20 at destinations 1, 2, and 3, respectively. Introduce...
Describe two ratios from each of the five groups of ratios, including how to calculate them.
At the end of 20X5, a parent company, P plc, with one subsidiary had a holding representing 10 per cent of the equity of R Ltd, a clothing company. It had cost 80,000 when purchased at the start of...
Santa Fe Company purchased merchandise for resale from Mesa Company with an invoice price of $ 24,000 and credit terms of 3/10, n/60. The merchandise had cost Mesa $ 16,000. Santa Fe paid within the...
Shire Company's predetermined overhead rate is based on direct labor cost. Management estimates the company will incur $649,000 of overhead costs and $590,000 of direct labor cost for the period....
You plan to live 25 years after you retire. You want to withdraw $100,000 each year for 25 years. Your first withdrawal will take place the day after you retire. What is the four annuity formulas...
Harwood Company's quality cost report is to be based on the following data: 2021 2022 Depreciation of test equipment $94,000 $95,000 Audits of the effectiveness of the quality system $54,000 $51,000...
Cash contribution of 4,000 to the Accounting Society (a charity) Purchase of art object at an Accounting Society Charitable event for $1,200 (FMV $800) Donation of 3-year-old clothing (basis 800; FMV...
The government is issuing $100 million in 10 year debt and receives the following bids. $25 million is reserved for non-competitive tenders. At what yield will the non-competitive tenders be issued...
Suppose that you must choose between two procedures for performing a hypothesis test-say, Procedure A and Procedure B. Further suppose that, for the same sample size and significance level, Procedure...
Avatar Financials, Inc., located on Madison Avenue, New York City, is a company that provides financial advice to individuals and small- to mid-sized businesses. Its primary operations are in wealth...
On 1 January 2015 J McFarlane bought a computer (cash price 2,092) from Pear Ltd on the following hire purchase terms. McFarlane was to make an immediate payment of 600 and three annual payments of...
A large bakery scrapped all its equipment and replaced it with new equipment purchased on hire purchase over a period of three years, paying 9,980 on 1 January 2016, and further annual payments of...
F Gibb Ltd has a branch in Stirling at which a full set of books is kept. At the end of the year the following summary is compiled of the transactions between the branch and headquarters as recorded...
Problem Set Time Value of Money 1. In 10 years, what is the value of $100 invested today at an interest rate of 8% per year, compounded annually? 2. In 10 years, what is the value of $100 invested...
The Blending Department of Luongo Company has the following cost and production data for the month of April. Costs: Work in process, April 1 Direct materials: 100% complete $120,000 Conversion costs:...
Q3 plz answer correctly and check work Builtrite's upper management has been comparing their books to industry standards and came up with the following question: Why is our operating profit margin...

If stock is removed from the analysis when calculating the acid test ratio, why isnt the figure

Question:

Step by Step Answer:

Debtors can be very difficult to turn into cash However there are three aspects of debtors that make ...View the full answer

Frank Woods Business Accounting Volume 2

Students also viewed these Business questions