A-LevelAccountingAnalysis and communication of accounting information9706/12 · May/June 2015 · Q211 Mark

Which ratio will give the best indication of short term liquidity?

Acurrent ratio

Bliquid (acid test) ratio

Ctrade payables turnover (days)

Dtrade receivables turnover (days)

✓ Correct answer

B: liquid (acid test) ratio

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Topic: Analysis and communication of accounting information, A-Level Accounting (syllabus 9706). Multiple choice, 1 mark.
Source: A-Level Accounting, May/June 2015 Paper 1 Variant 2, question 21.

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