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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 − Inventory − Prepaid Expenses) / Current Liabilities. It excludes inventory as it is the least liquid current asset.

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