A Company Has a Current Ratio of 2 to 1

question 111

Multiple Choice

A company has a current ratio of 2 to 1.This ratio will decrease if the company:

• A)sells merchandise for more than cost and records the sale using the perpetual inventory method.
• B)pays a large account payable which had been a current liability.
• C)borrows cash on a six-month note.
• D)receives a 5 percent stock dividend on one of its marketable securities.
• E)None of these choices are correct.

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Definitions:

Digitize Data

The process of converting information into a digital format that can be processed, stored, and transmitted electronically.

Data Expansion

The process of increasing the amount or granularity of data, often through adding detail, breaking down categories, or incorporating additional sources.

Synchronous

Refers to events or processes that occur at the same time or at the same rate.

Exchange

The act of giving one thing and receiving another in return, especially in a trade or economic context.