The Following Information Concerning the Current Assets and Current Liabilities

question 34

Multiple Choice

The following information concerning the current assets and current liabilities of
Mason Company at December 31, 2017, is presented below.
$\begin{array}{lrr}\text { Current Assets }\\\text { Cash } & & \$ 6,700 \\\text { Accounts Receivable } & \$ 7,900 & \\\text { Less Allowance } & \underline{ (70) }& 7,830 \\\text { Inventory } & & 2,270 \\\text { Prepaid expenses } & & \underline{500} \\\text { Total }& & \underline{\$17,300}\\\\\text { Current Liabilities }\\\text { Accounts payable } && \$ 9,000 \\\text { Wages payable } && 500 \\\text { Taxes payable } & &200 \\\text { Rent payable } & &1,600 \\\text { Notes payable } &&\underline{ 2,000} \\\text { Total } &&\underline{ \$ 13,300}\end{array}$
Based on this information, what would the quick ratio be if Mason sold all of its inventory for $6,000 cash?

• A)The quick ratio would decrease from 1.09 to 0.19.
• B)The quick ratio would decrease from 1.30 to 0.85.
• C)The quick ratio would increase from 1.30 to 1.54.
• D)The quick ratio would increase from 1.09 to 1.54.

Identify and explain the roles and obligations of merchants under the UCC.

Comprehend the concepts of good faith, value, and bona fide transactions under the UCC.

Distinguish between different types of sales contracts (e.g., sale on approval, sale or return) and understand the implications for risk of loss and title transfer.

Recognize the special provisions for buyers in the ordinary course of business.

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Definitions:

Cost Cutting

The process of reducing expenses to increase profitability, often by eliminating resources or reducing the scope of operations.

Communication Pattern

The habitual ways in which individuals exchange information, thoughts, and feelings with others, often characterized by specific styles and methods of communication.

Temporarily

For a limited period of time; not permanently.

Passive-congenial Relationship

A type of relationship characterized by low levels of conflict and emotional expression, where partners maintain a peaceful coexistence without deep engagement.