Critical Thinking Questions Case 3-1 George Runs a Mid-Size Accounting

question 64

Multiple Choice

Critical Thinking Questions Case 3-1 George runs a mid-size accounting practice and recently upgraded to Excel 2013.He expects sales to grow in the next few months during tax season.After that, he would like to begin upgrading some of the equipment and furniture for the employees in his office.He will start with the Reception area, which has the most visibility.If sales reach a certain amount by the end of April, George will purchase a desk, chair, computer, and software upgrade for the receptionist.Otherwise, George will just purchase the desk and chair.How can George determine the best action to take using a Sales Data worksheet?

• A) Copy and paste all his Sales data formulas with relative references
• B) Add an IF function formula to his Sales data worksheet
• C) Add the NOW function formula to his Sales data worksheet
• D) Copy and paste all his Sales data formulas with absolute references

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Definitions:

Acid-Test Ratio

A stringent indicator of a company's short-term liquidity, calculated by dividing current assets excluding inventory by current liabilities.

Working Capital

The difference between a company's current assets and its current liabilities, indicating the liquidity of the business.

Financial Data

Quantitative information about financial conditions, performance, and transactions of a business, individual, or entity.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations with its current assets.