Accounting 9706 · AS & A Level · Analysis and communication of accounting information

Analysis and communication of accounting information — practice question

Why is inventory left out when calculating the quick ratio?

  • ABusiness can choose either FIFO and AVCO for inventory valuation.
  • BInventory can become obsolete easily.
  • CInventory is the slowest current asset to be converted into cash.
  • DThe value of inventory fluctuates.

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