Arid Company Has a Quick Ratio of 0

question 53

Multiple Choice

Arid Company has a quick ratio of 0.90.Which of the following,if it occurred on the last day of the accounting period,would increase Arid's quick ratio?

• A)Borrowing with a short-term promissory note.
• B)Paying off some accounts payable.
• C)Accruing interest payable on its promissory notes.
• D)Purchasing inventory on account.

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Definitions:

Semi-annual

Occurring twice a year; a term often used in finance to describe payments or interest calculations that happen twice within a year.

Coupon Bond

A type of bond that pays the holder interest at fixed intervals through coupons.

Par Value

The face value of a bond or stock, representing the amount that the issuing company agrees to pay at maturity or the value on which dividend payments are calculated.

Coupon Rate

The interest rate paid by a bond issuer on its nominal value, determining the periodic interest payments to bondholders.