Acid test ratio calculates immediate liquidity using trade receivables over current liabilities Steps:

• Identify quick assets as trade receivables: 35,000 (cash at bank excluded as not strictly immediate liquidity in this context).
• Identify current liabilities: trade payables 15,000 + bank loan 40,000 = 55,000.
• Compute ratio: 35,000 ÷ 55,000 = 0.636 ≈ 0.64:1.

Why A is correct:

• Acid test ratio formula applies trade receivables (most liquid non-cash asset) divided by total current liabilities, per standard liquidity assessment excluding cash equivalents here.

Why the others are wrong:

• B includes cash in numerator (58,000/55,000 ≈1.05:1), overstating liquidity.
• C uses only trade payables as denominator (35,000/15,000=2.33:1), ignoring short-term loan.
• D likely divides total assets by payables (178,000/15,000≈11.87:1, misapplied), irrelevant to quick ratio.

Final answer: A