Wilker Industries Has a Current Ratio of 1

question 97

Multiple Choice

Wilker Industries has a current ratio of 1.8.If Wilker collects a payment from a customer on account, what is expected to happen to the company's current ratio?

• A)It will increase.
• B)It will decrease.
• C)It will stay the same.
• D)The effect is based on the amount of debt a company holds at the end of the period.

Understand the recording of sales returns and allowances.

Distinguish the operating cycles and financial reporting between service and retail businesses.

Know how the cost of merchandise sold and inventory costs are determined and reported.

Understand how sales, operating expenses, and net income are related in a merchandise business.

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Definitions:

Aggregate Demand

The combined quantity of goods and services that is sought in the economy, set at a certain price level for a specific period.

Aggregate Supply

The total supply of goods and services that firms in an economy plan on selling during a specific time period, depending on the price level.

Aggregate Demand

The overall consumption requirement for goods and services in an economic landscape, priced at a given level over a set duration.

Economic Fluctuations

Variations in the level of economic activity over time, characterized by periods of boom and recession.