Question on: JAMB Accounting - 2024
The short term solvency of a company is determined with ___ ratio
A
debtors to equity
B
current
C
acid test
D
gross profit margin
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Correct Option: C
Short-term solvency refers to a company’s ability to meet its short-term liabilities. The current ratio measures this by comparing current assets to current liabilities. A higher value indicates better short-term solvency.
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