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

question 163

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 recorded the sale of inventory. As a result of this transaction, Gant's quick ratio will:

• A)Decrease.
• B)Increase.
• C)Remain the same.
• D)Cannot be determined.

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Definitions:

Reductive

A method or approach that simplifies complex systems or phenomena by breaking them down into their most basic components or aspects.

Analytical Thinking

The process of breaking down complex information into smaller components for better understanding or problem solving.

Logical

Pertaining to or characterized by clear, rational, and coherent reasoning or thinking.

Younger Adolescents

Individuals who are in the early stages of adolescence, typically around the ages of 10-14.