alleryQuick (Acid Test) Ratio EXCLUDES which item from current assets?
ACash
BDebtors
CInventory
DBank balance
Answer & Solution
Correct answer: C. Inventory
1. Quick assets = Current assets less inventory and prepaid expenses.
2. Inventory is excluded because it is the least liquid of current assets.
3. Cash, debtors and bank balances are quickly realisable.
4. Hence (C) is the excluded item.
_Source: Maharashtra Balbharati Std XII Book-Keeping & Accountancy, Ch 9 "Analysis of Financial Statements", §9.2 ¶§9.2_
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