Respuesta :
The acid test, also known as the quick ratio, compares a company's most short-term assets to its most short-term liabilities in order to evaluate if it has enough cash on hand to fulfill its immediate obligations, such as short-term debt. The acid-test ratio disregards current assets like inventory and cost-upfront payments. Thus the correct answer is Prepaid expenses since they can be liquidated quickly.
What is short-term debt?
Short-term debt, also known as current liabilities, refers to a company's debts that are due to be repaid within a year.
Short-term bank loans, accounts payable, salaries, lease payments, and income taxes payable are typical examples of short-term debt.
The quick ratio is the most often used indicator of short-term liquidity and is crucial in evaluating a company's credit rating.
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