The 'Quick Ratio' excludes inventory because: MCQ with Answer and Explanation

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The 'Quick Ratio' excludes inventory because:

A. Inventory is never sold

B. Inventory is not an asset

C. Inventory may not be easily convertible into cash

D. Inventory is a fixed asset

Answer: Option C

Solution (By JKSSB Mock Tests)

Quick ratio considers only quick assets (liquid), inventory is less liquid, so excluded.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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