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      Question

      The acid-test (quick) ratio

      excludes:
      A Cash and cash equivalents Correct Answer Incorrect Answer
      B Marketable securities Correct Answer Incorrect Answer
      C Inventory Correct Answer Incorrect Answer
      D Short-term receivables Correct Answer Incorrect Answer

      Solution

      Quick Ratio = (Current Assets βˆ’ Inventory βˆ’ Prepaid Expenses) / Current Liabilities. It excludes inventory as it is the least liquid current asset.

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