Examlex
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
Subsidiary
A company that is controlled by another company, known as the parent company, through majority ownership.
Dividends
Payments made by a corporation to its shareholders, usually as a distribution of profits.
Investment in Grub
An allocation of resources into a project or company named Grub, expecting future returns.
Equity Method
An accounting technique used by firms to assess the profits earned through their investments in other companies by recognizing their share of the earnings.
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