Question $31$

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$4$an $-$ Which one of the following is a correct description of the acid test ratio?

a$.$ It assesses the extent to which current liabilities are covered by liquid assets, excluding inventories.

b$.$ It measures how quickly a company can pay off its longterm debts without raising further capital.

c$.$ It is the same as the current ratio but includes inventory.

d$.$ It is used to determine the profitability of the entity's investments.

e$.$ It measures the entity's total assets against total liabilities.