Answer (C) is correct . The acid test, or quick, ratio equals quick assets divided by current liabilities. Quick assets consist of cash ($100,000) and accounts receivable ($200,000), for a total of $300,000. The current liabilities consist of accounts payable, interest payable, and notes payable, for a total of $140,000 ($80,000 + $10,000 + $50,000). Hence, the quick ratio is 2.14 ($300,000 ¡Â $140,000).

Answer (A) is incorrect because The quick assets divided by the sum of the current liabilities and the bonds payable equal 0.68.
Answer (B) is incorrect because Current assets divided by the sum of current liabilities and the bonds payable equal 1.68.
Answer (D) is incorrect because Omitting interest payable from the current liabilities results in 2.31.