Which of the Following Activities Will Increase a Firm's Current

question 58

Multiple Choice

Which of the following activities will increase a firm's current ratio?

• A)Purchase inventory using cash
• B)Buy equipment with a short-term bank loan
• C)Accrued wages and taxes increase
• D)None of these statements will increase a firm's current ratio

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Definitions:

Direct Labor Costs

These are the salaries and wages paid to employees directly involved in producing a company's goods or services.

Controllable Variance

Controllable variance refers to the difference between actual and expected figures that can be influenced by the actions of managers.

Overhead Costs

General expenses related to the operation of a business that are not directly attributed to creating a product or service.

Volume Variance

The difference between the budgeted and actual quantity of units sold or produced, affecting budget and operational planning.