Current Ratio : Current ratio is the ratio which is used to measure a company’s liquidity and it considers current assets and current liabilities. Acid Test Ratio: Acid test ratio is a ratio which is measures the ability of a company to pay off its current obligations out of near cash or quick assets. To prepare: Table showing (1) current ratio, (2) acid-test ratio and (3) working capital after each transaction.

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Chapter 13, Problem 3PSA

To determine

Current Ratio:

Current ratio is the ratio which is used to measure a company’s liquidity and it considers current assets and current liabilities.

Acid Test Ratio:

Acid test ratio is a ratio which is measures the ability of a company to pay off its current obligations out of near cash or quick assets.

To prepare: Table showing (1) current ratio, (2) acid-test ratio and (3) working capital after each transaction.

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