Author Question: Judith Corp. has current assets worth 50,000 and current liabilities worth 75,000. Current assets ... (Read 156 times)

chads108 · **on:** Jul 6, 2018

Judith Corp. has current assets worth 50,000 and current liabilities worth 75,000. Current assets include inventory of 10,000. Calculate acid test ratio.

A) 1.500
B) 0.533
C) 0.625
D) 0.667

Question 2

When an entry is posted, the last step in the process is
a. recording the explanation.
b. placing the account number in the Post. Ref. column of the journal.
c. placing the journal page number in the Post. Ref. column of the ledger.
d. placing the account number in the Post. Ref. column of the ledger.
e. placing the balance of the account in either the debit or credit column in the ledger.

Beatricemm · **Reply #1 on:** Jul 6, 2018

Answer to Question 1

B
Explanation: B) Acid test ratio = (Current assets - Inventory) / Current liabilities
Acid test ratio = (50,000 - 10,000 ) / 75,000 = 0.533

Answer to Question 2

b