The ______ is a measure of liquidity that excludes generally the least liquid asset ______.a.Current ratio, inventory.b.Quick ratio, inventoryc.Current ratio, Accounts receivable.d.Quick ratio, Accounts receivable.
Question
The ______ is a measure of liquidity that excludes generally the least liquid asset ______.a.Current ratio, inventory.b.Quick ratio, inventoryc.Current ratio, Accounts receivable.d.Quick ratio, Accounts receivable.
Solution
The answer to the question is option d. Quick ratio, Accounts receivable.
Step 1: Read the question and understand what is being asked. The question is asking for a measure of liquidity that excludes a specific asset.
Step 2: Evaluate the options provided. The options are: a. Current ratio, inventory. b. Quick ratio, inventory. c. Current ratio, Accounts receivable. d. Quick ratio, Accounts receivable.
Step 3: Determine the correct option. The measure of liquidity that excludes a specific asset is the Quick ratio. The Quick ratio is calculated by excluding inventory from the current assets. Therefore, the correct answer is option d. Quick ratio, Accounts receivable.
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