As of December 31,Year 1,Gant Corporation Had a Current Ratio

question 108

Multiple Choice

As of December 31,Year 1,Gant Corporation had a current ratio of 1.29,quick ratio of 1.05,and working capital of $18,000.The company uses a perpetual inventory system and sells merchandise for more than it cost.On January 1,Year 2,Gant paid $250 for transportation in cost on merchandise it had received.Which of the following statements is incorrect?

• A) Gant's current ratio will remain the same
• B) Gant's quick ratio will increase
• C) Gant's working capital will remain the same
• D) Gant's quick ratio will increase and its current ratio will remain the same

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Definitions:

Hypothesis

A proposed explanation made on the basis of limited evidence as a starting point for further investigation.

Expected Frequency

The predicted count of occurrences or the number of times an outcome is anticipated to happen in a statistical experiment.

Normal Distribution

A probability distribution that is symmetric about the mean, showing that data near the mean are more frequent in occurrence.

Interval

A range of numbers between two specified limits.