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Why are inventories and prepaid expenses excluded in computing the acid-test ratio?

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Accounting

Why are inventories and prepaid expenses excluded in computingthe acid-test ratio?

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Ans Acid test ratio is also known as Quick Ratio which is calculated by dividing Quick assets and Current LiabilitiesThis is a liquidity ratio which indicates the companys ability to meet its short term obligation Now the Quick assets are those current assets which can easily be    See Answer
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