Given below are two statements, one is labelled as Assertion (A) and the other is labelled as Reason (R): Assertion (A): Quick ratio is a more penetrating test of liquidity than the current ratio, yet a high quick ratio does not necessarily imply sound liquidity. Reason (R): A company with a high value of quick ratio can suffer from a shortage of funds if it has slow-paying, doubtful, and long-duration outstanding debtors. In light of the above statements, choose the most appropriate answer from the options given below:

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General Studies · Financial Analysis

Verified Solution4 OptionsUpdated: October 2026👁️1 View

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Both A and R are correct, and R is the correct explanation of A

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Answer 1

Both A and R are correct, and R is the correct explanation of A

Answer 2

Both A and R are correct, but R is not the correct explanation of A

Answer 3

A is correct but R is not correct

Answer 4

A is not correct but R is correct

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