An Increase in Current Liabilities Will Have Which One of the Following

question 80

Multiple Choice

An increase in current liabilities will have which one of the following effects,all else held constant? Assume all ratios have positive values.

• A)increase in the cash ratio
• B)increase in the net working capital to total assets ratio
• C)decrease in the quick ratio
• D)decrease in the cash coverage ratio
• E)increase in the current ratio

---

Definitions:

Slope

In mathematics and economics, a measure of steepness or incline, often representing the rate of change of a function on a graph.

Cost Driver

A factor that causes a change in the cost of an activity or a product, such as production volume or labor hours.

Activity-based Costing

A methodology that assigns production costs to products based on the activities required to produce them, aiming for more accurate cost allocation.

Volume-based

A pricing or costing method that changes based on the amount of goods or services produced or sold.