Which of the Following Actions Will Cause an Increase in the Quick

question 65

Multiple Choice

Which of the following actions will cause an increase in the quick ratio in the short run?

• A) $1,000 worth of inventory is sold,and an account receivable is created.The receivable exceeds the inventory by the amount of profit on the sale,which is added to retained earnings.
• B) A small subsidiary which was acquired for $100,000 two years ago and which was generating profits at the rate of 10 percent is sold for $100,000 cash.(Average company profits are 15 percent of assets. )
• C) Marketable securities are sold at cost.
• D) All of the above.
• E) Answers a and b above.

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Definitions:

Thomas Jefferson

The third President of the United States (1801-1809), principal author of the Declaration of Independence (1776), and one of the most influential Founding Fathers for his promotion of the ideals of democracy and republicanism.

Independent Nation

A sovereign state with complete autonomy and self-governance, not controlled by any foreign power.

Whiskey Rebellion

A tax protest in the United States in the 1790s, the first major challenge to the new government's authority, showing federal power by quelling the rebellion.

Federalists

A political group in the late 18th century United States that supported a strong federal government and the ratification of the Constitution.