Which of the Following Actions Will Cause an Increase in the Quick

question 26

Multiple Choice

Which of the following actions will cause an increase in the quick ratio in the short run?

• A)$1,000 worth of inventory is sold, and an account receivable is created.The receivable exceeds the inventory by the amount of profit of the sale, which is added to retained earnings.
• B)A small subsidiary which was acquired for $100,000 two years ago and which was generating profits at the rate of 10 percent is sold for $100,000 cash.(Average company profits are 15 percent of assets.)
• C)Marketable securities are sold at cost.
• D)All of the above.
• E)Answers a and b above.

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Definitions:

Anticipated Need

Expectation of a requirement or demand in the future, often based on current trends or forecasts.

New Product Line

A group of related products that are offered by a company to address customer needs in a particular market segment, often involving the introduction of innovations or expanding the brand's reach.

Innate Fears

Fears that are instinctively present from birth, not requiring personal experiences to be triggered.

Adaptive Advantage

A genetic trait that improves the survival or reproductive success of an organism in its environment.