Other Things Held Constant, Which of the Following Will Not

question 34

Multiple Choice

Other things held constant, which of the following will not affect the quick ratio? (Assume that current assets equal current liabilities.)

• A) Fixed assets are sold for cash.
• B) Cash is used to purchase inventories.
• C) Cash is used to pay off accounts payable.
• D) Accounts receivable are collected.
• E) Long-term debt is issued to pay off a short-term bank loan.

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Definitions:

Federal Reserve Notes

The physical bills issued by the Federal Reserve, serving as the primary form of paper money in the United States.

Financial Intermediaries

are institutions that facilitate the channeling of funds between savers and borrowers, including banks, investment companies, and insurance companies.

Severe Penalties

Punishments or sanctions that are especially harsh or stringent, typically applied in legal contexts.

Financial Intermediaries

Institutions that facilitate the channeling of funds from savers to borrowers by intermediating between them.