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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:
Sales Discounts
Reductions in the price of goods or services offered to customers to encourage prompt payment or as part of a sales promotion.
Control Account
An account used in the general ledger to summarize transactions detailed in subsidiary ledgers for efficient reporting and verification purposes.
Subsidiary Ledger
A detailed ledger that contains the transaction details of accounts like accounts receivable or payable, which are summarized in the general ledger.
Controlling Account
A general ledger account that summarizes and controls the totals from various subsidiary accounts.
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