[table]
| Dec 31, 2019 | Dec 31, 2020 Current Assets | | Cash And Cash Equivalents | 768,000 | 860,000 Short Term Investments | - | - Net Receivables | 1,124,000 | 950,000 Inventory | 404,000 | 396,000 Office Supplier | 203,000 | 177,000 Total Current Assets | 2,499,000 | 2,383,000 | | Liabilities | | Current Liabilities | | Accounts Payable | 2,120,000 | 2,090,000 Short/Current Long Term Debt | 137,000 | 52,000 Other Current Liabilities | - | - Total Current Liabilities | 2,257,000 | 2,142,000 | |
[/table]The Quick Ratio for 2019 is:

Question

[table]
| Dec 31, 2019 | Dec 31, 2020 Current Assets |  |  Cash And Cash Equivalents | 768,000 | 860,000 Short Term Investments | - | - Net Receivables | 1,124,000 | 950,000 Inventory | 404,000 | 396,000 Office Supplier | 203,000 | 177,000 Total Current Assets | 2,499,000 | 2,383,000 |  |  Liabilities |  |  Current Liabilities |  |  Accounts Payable | 2,120,000 | 2,090,000 Short/Current Long Term Debt | 137,000 | 52,000 Other Current Liabilities | - | - Total Current Liabilities | 2,257,000 | 2,142,000 |  | 
[/table]The Quick Ratio for 2019 is:

BlackTom AI · Accepted Answer

To determine the Quick Ratio for 2019, I will extract the necessary figures from the 2019 column and apply the formula: Quick Ratio = (Cash + Net Receivables) / Current Liabilities.
First, identify the numbers for 2019: Cash and Cash Equivalents = 768,000; Net Receivables = 1,124,000; Current Liabilities = 2,257,000. These are the components we need for the calculation.
Now, compute the numerator: Cash + Net Receivables = 768,000 + 1,124,000 = 1,892,000.
Next, compute the ratio by dividing the numerator by the denominator: 1,892,000 / 2,257,000 ≈ 0.838. When rounded to two decimals, this is approximately 0.84.
With the numerical result in mind, evaluate each option:
- Option a: 1:1 would require a ratio of 1.000, meaning the numerator equals the denominator (1,892,000 would need to equal 2,257,000). Since 1,892,000 < 2,257,000, this is incorrect.
- Option b: 0.45:1 implies a ratio around 0.45, which would correspond to a numerator near 1,015,650 (0.45 × 2,257,000). Our actual numerator 1,892,000 is notably higher, so this is not correct.
- Option c: 0.67:1 suggests a numerator around 1,513,? (0.67 × 2,257,000 ≈ 1,512,?); however, the calculated numerator is 1,892,000, which does not match. Therefore this option is incorrect.
- Option d: 0.84:1 matches the computed value closely (0.838 ≈ 0.84). This aligns with the standard rounding convention used in financial reporting.
In summary, the calculation yields a Quick Ratio of approximately 0.84:1 for 2019, which corresponds to option d. The other choices misrepresent the relationship between cash plus receivables and current liabilities, either being exactly 1:1 or lower values that do not fit the actual numbers.

252_2HO004_Accounting II

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