A Corporation Wants to Increase Its Current Ratio from Its

question 3

Multiple Choice

A corporation wants to increase its current ratio from its present level of 1.2 before it ends the fiscal year. The action having the desired effect is:

• A)delaying the next payroll.
• B)writing down impaired assets.
• C)selling furniture for cash.
• D)selling current marketable securities at cash for their book value.

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Definitions:

First-In, First-Out Method

An accounting method for valuing inventory that assumes the first items placed into inventory are the first sold.

Manufacturing Activity

The process of converting raw materials into finished products through various stages such as assembly, machining, or processing.

Materials

The physical components used in the production of goods, ranging from raw materials to parts and packaging.

Assembly Department

A section within a manufacturing facility where components are assembled into finished products, an essential part of the production process.