Which One of the Following Would Likely Be Most Detrimental

question 101

Multiple Choice

Which one of the following would likely be most detrimental to a firm's current ratio if that ratio is currently 2?

• A) Collecting payment on an accounts receivable
• B) Selling marketable securities at cost
• C) Paying off accounts payable with cash
• D)Purchasing inventory on credit

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Definitions:

Equal Credit Opportunity Act

A U.S. federal law designed to ensure that all consumers have an equal chance to obtain credit, prohibiting discrimination.

Unauthorized Purchases

Transactions made without the permission of the account holder or beyond the scope of their authority.

Deceptive Claim

A false or misleading statement made about a product or service, typically for the purpose of deceiving consumers.

Material Misrepresentation

A false statement of fact made by one party to another, which, had the second party known the truth, it may have altered their decision to enter into a contract or agreement.