US GAAP Balance Sheet

Quick Ratio (Acid-Test)

Solvency ratio measuring immediate liquid assets (cash, securities, AR) against current liabilities.

Detailed Definition & General Ledger Context

Quick Ratio (Acid-Test) is governed by US GAAP Balance Sheet in general ledger financial reporting and fixed asset sub-ledgers. Maintaining accurate records of Quick Ratio (Acid-Test) is vital for audit compliance, asset balance verification, and tax schedule reconciliation.

Mathematical Standard & Equation

            Quick Ratio = (Cash + Marketable Securities + Net Receivables) ÷ Current Liabilities
          

General Ledger Journal Entry Standard

            Debit: Ratios Expense Account

            Credit: Ratios Contra-Asset / Payable Liability

Common Operational Pitfalls

Failing to reconcile fixed asset sub-ledgers with the general ledger trial balance monthly.
Conflating IRS MACRS tax depreciation tables with GAAP straight-line financial reporting.
Misclassifying lease obligations under ASC 842 capitalization standards.

Used in these R2R Calculators

Launch Calculator →

Authoritative Source

Source: https://www.fasb.org/ ↗