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 as 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: 9781292101552

11th Global Edition

Authors: Lyn Fraser, Aileen M. Ormiston

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Question Posted: Mar 20, 2024 12:00 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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