In the bathroom addition file, cash is $28,000, receivables are $44,000, inventory is $16,000, and current liabilities are $60,000. What is the quick ratio?
Correct Answer
D) 1.20.
Quick assets are cash plus receivables: $28,000 + $44,000 = $72,000. $72,000 / $60,000 = 1.20.
Why This Is the Correct Answer
Quick assets are cash plus receivables: $28,000 + $44,000 = $72,000. $72,000 / $60,000 = 1.20.
Why the Other Options Are Wrong
Option A: 1.00.
1.00. is below the supported result for quick ratio; it likely uses the wrong base, period, or account bucket.
Option B: 1.47.
1.47. is above the supported result for quick ratio; it likely adds an unsupported amount or compares the wrong financial base.
Option C: 1.33.
1.33. is above the supported result for quick ratio; it likely adds an unsupported amount or compares the wrong financial base.
Memory Technique
Assets and cash live in different drawers; Checking Assets tells which opens.
Reference Hint
Study anchor (closed-book): memorize Quick ratio from CSLB Law and Business Study Guide; CSLB 2026 Law Book / CSLB Law and Business Study Guide Business Finances; know the rule or calculation trigger without relying on exam-room lookup.
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