For Each Transaction Numbered 1 Through 4 Below, Identify Which $\quad$

question 13

Essay

For each transaction numbered 1 through 4 below, identify which effect (a through g) would most likely occur as a result of the transaction.
$\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ Effects
a. Increase in current ratio and earnings per share
b. Decreases current ratio; increases earnings per share
c. Increases current ratio; does NOT change earnings per share
d. Decrease in current ratio and earnings per share
e. Decreases current ratio; does NOT change earnings per share
f. Does not change the current ratio or earnings per share
g. Can't determine the direction of changes in the current ratio

_____ 1. A passive investment in equity securities are purchased for $1,000 cash.
_____ 2. The securities that cost $1,000 have a yearend market value of $800.
_____ 3. The securities that cost $1,000 have a yearend market value of $1,200.
_____ 4. The securities that cost $1,000 and have a current balance sheet value of $800 are sold for $900.

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Definitions:

Conductance Testers

Devices used to measure the ability of an electrolyte solution, such as battery acid, to conduct electricity, often used in automotive battery diagnostics.

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The amount of electrical energy produced by a generator, measured in watts or kilowatts.

Fully Charged

The status of a battery or cell when it has reached its maximum electrical storage capacity.

12-Volt Battery

A common type of battery used in vehicles to power the electrical system, typically lead-acid based, providing energy for starting and accessories.