Why is the quick ratio a more rigorous test of short-run solvency than the current ratio? (a)

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Why is the quick ratio a more rigorous test of short-run solvency than the current ratio?

(a) The quick ratio considers only cash and marketable securities a current assets

(b) The quick ratio eliminates prepaid expenses for the numerator.

(c) The quick ratio eliminates prepaid expenses for the denominator.

(d) The quick ratio eliminates inventories from the numerator.

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Understanding Financial Statements

ISBN: 9780131878563

8th Edition

Authors: Lyn M Fraser, Aileen Ormiston

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Question Posted: Oct 04, 2024 10:00 AM

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Why is the quick ratio a more rigorous test of short-run solvency than the current ratio? (a)

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Understanding Financial Statements

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