O-LevelAccountingAnalysis and interpretation7707/12 · Oct/Nov 2022 · Q311 Mark

When calculating the liquid (acid test) ratio, what is compared to the liquid assets?

Acurrent liabilities

Bintangible assets

Cnon-current assets

Dnon-current liabilities

✓ Correct answer

A: current liabilities

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Topic: Analysis and interpretation, O-Level Accounting (syllabus 7707). Multiple choice, 1 mark.
Source: O-Level Accounting, Oct/Nov 2022 Paper 1 Variant 2, question 31.

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