IIA Exam IIA-CIA-Part3 Topic 5 Question 68 Discussion

Actual exam question for IIA's IIA-CIA-Part3 exam

Question #: 68
Topic #: 5

[All IIA-CIA-Part3 Questions]

Which of the following is an indicator of liquidity that is more dependable than working capital?

AAcid-test (quick) ratio

BAverage collection period

CCurrent ratio.

DInventory turnover.

Show Suggested Answer

Suggested Answer: A

by Alishia at Nov 27, 2023, 04:07 AM

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Dwight

3 months ago

The average collection period? That's more about cash flow than liquidity. This exam is tripping me up!

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Judy

29 days ago

Thanks for the tip, I'll keep that in mind for the exam.

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Thora

30 days ago

Don't worry, just remember that the acid-test ratio is a better indicator of liquidity.

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Nobuko

1 months ago

D) Inventory turnover.

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Alana

2 months ago

C) Current ratio.

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Stephanie

2 months ago

B) Average collection period

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Fatima

2 months ago

A) Acid-test (quick) ratio

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Nobuko

3 months ago

Inventory turnover? Really? That's like using a sledgehammer to crack a nut. Definitely not the right answer here.

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Lelia

3 months ago

Hmm, I'm torn between the acid-test ratio and the current ratio. Both seem like solid options.

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Curtis

3 months ago

I'm going with the current ratio. It's a classic liquidity indicator that's hard to beat.

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Alton

2 months ago

I think the acid-test ratio is actually more dependable than working capital.

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Sherell

2 months ago

I agree, the current ratio is a solid indicator of liquidity.

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Rory

3 months ago

I think the acid-test ratio is even more dependable than working capital.

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Yuette

3 months ago

I agree, the current ratio is a solid indicator of liquidity.

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Tora

3 months ago

But the acid-test ratio excludes inventory, making it a more accurate measure of liquidity.

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Erick

3 months ago

The acid-test ratio seems like the obvious choice here. It's a more direct measure of liquidity than working capital.

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Kerry

2 months ago

Inventory turnover is important too, but I still think the acid-test ratio is the most dependable.

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Remona

2 months ago

D) Inventory turnover.

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Jacob

2 months ago

That's a valid point, the average collection period can also give insight into liquidity.

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Stephanie

2 months ago

B) Average collection period

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Hoa

2 months ago

I think the current ratio is also a good indicator to consider.

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Marcelle

2 months ago

C) Current ratio.

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Fanny

3 months ago

I agree, the acid-test ratio is a better indicator of liquidity.

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Marti

3 months ago

A) Acid-test (quick) ratio

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Juan

3 months ago

I disagree, I believe the answer is C) Current ratio.

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Tora

4 months ago

I think the answer is A) Acid-test (quick) ratio.

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