ACCOUNTS

[Bachelor]

Its because in order to calculate quick ratio, stock is deducted from current assets as its the least liquid asset and stock may take time to sell, thats why its better way of measuring liquidity in a business... hope this helps

simple answer is this that stock cant be turned in to cash quickly for repaying crediotors so its deducted from the ratio..

 

[Bachelor]

ye

One of my tutor said that all the items under current assets can be easily turned into cash except inventory. Is that the reason y quick acid test ratio is better than current ratio. Is this correct?

Yes..

 

[StormSupernova]

POA notes?

 

[StormSupernova]

Looking for POA 'O' level notes download