Which of the Following Actions Will Cause an Increase in the Quick

question 5

Multiple Choice

Which of the following actions will cause an increase in the quick ratio in the short run?

• A) $1,000 worth of inventory is sold, and an account receivable is created. The receivable exceeds the inventory by the amount of profit on the sale, which is added to retained earnings.
• B) A small subsidiary which was acquired for $100,000 two years ago and which was generating profits at the rate of 10 percent is sold for $100,000 cash. (Average company profits are 15 percent of assets.)
• C) Marketable securities are sold at cost.
• D) All of the answers above.
• E) Answers a and b above.

---

Definitions:

Functional Staff

Employees who specialize in certain areas or functions within an organization, such as finance, marketing, or human resources, providing expertise and supporting overall operations.

Technical Service

Support services focused on providing specialized assistance or expertise in specific technical areas, often related to products or infrastructure.

Organizing Function

A core management function that involves arranging people, tasks, and resources to work together to implement plans and achieve stated objectives.

Elastic

A term used to describe a situation where the demand or supply of a good or service is sensitive to changes in price.