Purchasers - #44,880
Sales - #85,850
Trade creditors - #12,250
Trade debtors - #24,000
Accrued expenses - # 350
Prepaid expenses - # 700
Stock 1/1/2006 - #25,120
Stock 31/12/2006 - #27,840
Calculate the acid test ratio
Sales - #85,850
Trade creditors - #12,250
Trade debtors - #24,000
Accrued expenses - # 350
Prepaid expenses - # 700
Stock 1/1/2006 - #25,120
Stock 31/12/2006 - #27,840
Calculate the acid test ratio
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Correct Answer: Option B
Explanation:
Acid test ratio = cash + cash equivalents + marketable securities + current accounts receivables / Total current liabilities
Acid test ratio = cash + cash equivalents + marketable securities + current accounts receivables / Total current liabilities