The Following Information Is Taken from the Balance Sheet of Menendez

question 84

Multiple Choice

The following information is taken from the balance sheet of Menendez Company on January 1, Year 1: On January 2, Year 1, the company earned revenue on account of $8,000.
How will this transaction affect the current ratio?

• A)It will decrease the current ratio to 1:1.
• B)It will increase the current ratio to 3:1.
• C)It will increase the current ratio to 5:1.
• D)It will have no effect on the current ratio.

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Definitions:

Reacquired

Refers to buying back previously sold or issued shares of a company's own stock or previously owned assets.

Discharged from Liability

The legal release of an individual or entity from any further responsibility for a debt or obligation.

Scientific Management

A management theory developed by Frederick Taylor, focusing on improving economic efficiency and labor productivity through systematic observation and measurement.

Deliberate Tasks

Activities consciously planned and executed to achieve a specific goal.