The Following Information Concerning the Current Assets and Current Liabilities

question 69

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, how would the quick ratio be affected if Mason purchased $1,300 of inventory on account?

• A)The quick ratio would decrease from 1.30 to 1.21.
• B)The quick ratio would not change.
• C)The quick ratio would decrease from 1.09 to 1.00.
• D)The quick ratio would decrease from 1.09 to 1.21.

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Definitions:

PCC

Pyridinium chlorochromate, a reagent used in organic chemistry for the oxidation of primary alcohols to aldehydes and secondary alcohols to ketones, maintaining the carbon skeleton.

LiCu

Lithium cuprate, a compound used in organic synthesis for coupling reactions.

Organic Product

The compound or compounds resulting from an organic reaction, often characterized by carbon-based structures.

Reaction

An activity in which reactants are processed and turned into different materials, which are identified as products.