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

question 128

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 $29,000. The company uses a perpetual inventory system and sells merchandise for more than it cost. On January 1, Year 2, Gant purchased merchandise on account for $4,000. Which of the following statements is true?

• A)Gant's current ratio will decrease.
• B)Gant's quick ratio will increase.
• C)Gant's working capital will increase.
• D)Gant's quick ratio will increase and its current ratio will decrease.

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Definitions:

Authoritarian States

Nations where political power is concentrated in a single authority, with limited personal freedoms.

Individual Wealth

The total value of all assets owned by a single person, minus any debts.

Communism

A political and economic ideology that aims at creating a classless society in which the means of production are owned and controlled by the community as a whole.

Capitalism

An economic system based on private ownership of the means of production and their operation for profit.