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Explanation:
Explanation
NEW QUESTION: 2
What is RST's acid-test or quick ratio at the end of Year 6?
A. 2.18 to 1
B. 2.00 to 1
C. 1.50 to 1
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Answer: B
Explanation:
Liquidity ratios measure the ability to meet short-term obligations. A commonly used liquidity ratio is the acid-test or quick ratio, which equals the sum of the quick assets net accounts receivable, financial assets held for trading. and cash) divided by current liabilities. This ratio at the end of Year 1 is 2.0 [(US $5,000 + $3,000 + $16,000) -$12,000]. RST Corporation's Income Statement for Year 5 and Year 6
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