WAEC Accounting 2021 Objective — Question 40
Question 40 of 50 from the West African Examinations Council (WAEC) Accounting 2021 Objective paper, with the correct answer and a full explanation.
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Acid test ratio of a firm measures the
- A. profitability of a firm
- B. capital adequacy of a firm
- C. liquidity of a firmCorrect
- D. quality of debtors of a firm
Explanation
The acid test (quick) ratio is used to determine the ability of a firm to meet its cash obligations as at when due, i.e. its liquidity.
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