Practicing Success
Practicing Success
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| Quick Assets do not include which of the following? |
Marketable Securities Prepaid Expenses Cash in hand Trade Receivables |
| Prepaid Expenses |
| The quick assets are defined as those assets which are quickly convertible into cash. While calculating quick assets we exclude the inventories at the end and other current assets such as prepaid expenses, advance tax, etc., from the current assets. Because of exclusion of non-liquid current assets , quick ratio is considered better than current ratio as a measure of liquidity position of the business. It is calculated to serve as a supplementary check on liquidity position of the business and is therefore, also known as ‘Acid-Test Ratio’. |
