State the Effect of the Following Transactions on the Current

question 164

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) Short-term investments are purchased for cash.
(e) Equipment is purchased for cash.
(f) Inventory purchases are made for cash.
(g) Accounts payable are paid.

---

Definitions:

Balanced Scorecards

A strategic planning and management system used to align business activities to the vision and strategy of the organization by monitoring performance against strategic goals.

Share Options

Financial instruments that give the holder the right, but not the obligation, to buy or sell shares of a company at a specific price within a certain timeframe.

Scientific Management

A theory of management that analyzes workflows to improve economic efficiency and labor productivity.

Hourly Wages

Compensation paid to employees based on the number of hours worked, typically expressed as an amount of money per hour.