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Which of the following accounts is not included in the quick ratio computation? 1-Cash 2-Marketable securities 3- A/R 4- Prepaid rent 5-A/P

Accounting Cost Accounting Financial Accounting
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Question added by Said Shaban , Accountant , Tri State Materials Testing
Date Posted: 2015/07/29
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Feroz Bandukra
by Feroz Bandukra , Finance Controller , Avenir Technologies FZE

Quick Ratio is calculating based on the current assets which can be convertible into liquid cash immediately. Generally Inventories is considered as non-liquid asset, but this is not available in your options.

The prepaid rent can be the answer if it cannot be convert into cash immediately, however if the scenario permit to convert this amount into cash immediately then it has be a part of Quick Ratio calculation. 

Joseph Bukenya
by Joseph Bukenya , Accountant , Uganda NCD Alliance

 

Prepaid rent 

Michael Lagunday
by Michael Lagunday , Accountant , Dubai Camel Racing Club

My answer is C. Prepaid rent.

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