If the Current Ratio Is Currently Greater Than 1

question 45

Multiple Choice

If the current ratio is currently greater than 1.0, which one of the following events would increase the current ratio?

• A)Purchase of inventory on account
• B)Receipt of money from a customer prior to the performance of service
• C)Accrual of warranty expense
• D)Sale of plant asset at a gain

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Definitions:

Inefficient Use

refers to the scenario where resources are not being utilized in the best possible manner, leading to waste or suboptimal outcomes.

Economy's Resources

The total means available for a country or region to produce valuable goods and services, including labor, capital, and natural resources.

Efficiently Produce

The ability of an entity or economy to maximize output with the given set of resources and technology, minimizing waste and costs.

Production Possibilities Frontier

A curve depicting all maximum output possibilities for two or more goods, given a set of inputs.