State the Effect of the Following Transactions on the Current

question 252

Essay

State the effect of the following transactions on the current ratio. Use increase, decrease, or no effect for your answer.
(a) Collection of an accounts receivable
(b) Declaration of cash dividends
(c) Additional stock is sold for cash
(d) Accounts payable are paid
(e) Equipment is purchased for cash
(f) Inventory purchases are made for cash
(g) Temporary investments are purchased for cash

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Definitions:

System I Thinking

A term in psychology that refers to the fast, automatic, intuitive approach of decision-making, as opposed to slow, deliberate, analytical thinking.

Confirmation Bias

The habit of seeking out, understanding, preferring, and remembering data in a manner that validates one's already established views or theories.

Hypothesis Testing

A statistical method that is used in making statistical decisions using experimental data.

Selection Task Performance

A measure of cognitive function that involves choosing relevant pieces of information while ignoring irrelevant ones to complete a task.