Dennisport Corporation Has an Acid-Test Ratio of 2

question 101

Multiple Choice

Dennisport Corporation has an acid-test ratio of 2.5. It has current liabilities of $40,000 and noncurrent assets of $70,000. The corporation's current assets consist of cash, marketable securities, accounts receivable, prepaid expenses, and inventory. If Dennisport's current ratio is 3.1, its inventory and prepaid expenses must be:

• A) $12,400
• B) $24,000
• C) $30,000
• D) $40,000

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Definitions:

Respiratory Membrane

A thin barrier in the lungs through which gas exchange occurs between the air in the alveoli and the blood in the capillaries.

Dalton's Law

A principle stating that the total pressure exerted by a mixture of gases is equal to the sum of the pressures that each individual gas would exert if it were present alone.

Gas Movement

The diffusion or transportation of gas molecules from an area of higher concentration to an area of lower concentration.

Alveolar Ventilation

The process of exchanging gases between the alveoli in the lungs and the external environment, primarily involving oxygen intake and carbon dioxide expulsion.