If a fiRm Uses Part of the Cash It Received

question 78

True/False

If a firm uses part of the cash it received from payment of an account receivable to buy inventory
and leaves the rest in its bank account, its current ratio will remain unchanged.

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Definitions:

Shear Zone

A generally tabular zone of rock that is more highly sheared and deformed than rocks outside the zone.

Fold and Thrust Belts

Regions in the Earth's crust where the layers of rock have been folded and thrusted over one another due to compressional forces, often found in mountainous areas.

Thrust Faults

Types of reverse faults that have a dip of 45 degrees or less, meaning they are nearly horizontal; significant in shaping landscapes by pushing rocks upwards.

Cleavage

A geological term referring to the tendency of minerals to break along flat, parallel planes of weakness in their crystal structure.