Which of the following items is not taken into account while computing quick ratio?

Cash

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Bank Balance

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Bank overdraft

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Sundry creditors

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Solution

The correct option is A Bank overdraft
The quick ratio is a financial ratio used to gauge a company's liquidity. The quick ratio is also known as the acid test ratio. The quick ratio compares the total amount of cash and cash equivalents + marketable securities + accounts receivable to the amount of current liabilities.

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