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Stock is not included in the current assets when calculating the acid test ratio because: 1. Only debtors can be included, as they will be

Stock is not included in the current assets when calculating the acid test ratio because:

1.

Only debtors can be included, as they will be converted into cash shortly

2.

It makes comparison easier as only two current liabilities are included in the acid test ratio

3.

Banks only recognise cash and debtors as liquid assets

4.

Stock is not a liquid asset

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