Explain what the acid-test ratio of a company measures

Assignment Help Accounting Basics

Reference no: EM131532926

Question: Use the following information on current assets and current liabilities to compute and interpret the acidtest ratio. Explain what the acid-test ratio of a company measures.

Cash . . . . . . . . . . . . . . . . . . . . $1,200

Prepaid expenses . . . . . . . . . . . . . $ 600

Accounts receivable . . . . . . . . 2,700

Accounts payable . . . . . . . . . . . . . 4,750

Inventory . . . . . . . . . . . . . . . . . 5,000

Other current liabilities . . . . . . . . 950

Reference no: EM131532926

Questions Cloud

Ikea supply contract with rangan exports : What actions should she take regarding the IKEA supply contract with Rangan Exports?

Determine the discount factors : Consider a Treasury note pays a coupon of $0.25 once a year. The maturity of the bond is four years and the face value $100. Determine the discount factors

Make journal entries to close balance in temporary revenue : Refer to QS 5-6 and prepare journal entries to close the balances in temporary revenue and expense accounts. Remember to consider the entry for shrinkage.

Define the term intrapreneurship : In your own words, briefly define the term "intrapreneurship" and list (just a bulletpoint list with one sentence clarification.

Explain what the acid-test ratio of a company measures : Use the following information on current assets and current liabilities to compute and interpret the acidtest ratio.

Discuss any recent purchases you have made : Discuss any recent purchases you have made and for which you feel that a similar rationale seemed to be at work.

Differentiae the acid-test ratio and the current ratio : Identify similarities and differences between the acid-test ratio and the current ratio. Compare and describe how the two ratios reflect a company's ability.

What trade barriers were in place during that decade : What trade barriers were in place during that decade? What are two pros and two cons of the trade barriers used?

What do you think led to the water crisis : A drought in California then led to rationing water in many uses in most of the State. What do you think led to the water crisis and how can it be fixed?

User Account

All Pages