JAMB Accounting 2022 Objective — Question 13

Question 13 of 40 from the Joint Admissions and Matriculation Board (JAMB) Accounting 2022 Objective paper, with the correct answer and a full explanation.

13. The measure of a company's ability to meet up with debt obligations as at and when due is called

A. (A) current ratio
B. (B) turnover ratio
C. (C) acid test ratioCorrect
D. (D) return on investment

Explanation

The acid test (quick) ratio is used to know how liquid a firm is — its ability to meet current liabilities using current assets, excluding stock.

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