Smith Corporation Entered into the Following Transactions

question 83

Multiple Choice

Smith Corporation entered into the following transactions:
Purchased inventory on account.
Collected an account receivable.
Purchased equipment using cash.
Which of the following statements is correct?

• A)The inventory purchase on account increased working capital.
• B)Collecting an account receivable increases working capital.
• C)The equipment purchase decreases working capital.
• D)The inventory purchase on account increased the quick ratio.

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Definitions:

Smooth Muscle Tissue

A type of muscle tissue found in various organs, such as the stomach, intestines, and blood vessels, that is not under conscious control.

Orbicularis Oris

A circular muscle around the mouth that controls the movements of the mouth and lips, crucial for speech and facial expressions.

Orbicularis Oculi

A muscle in the face that encircles the eye, responsible for enabling blinking and squinting.

Insertion

The place where a muscle is attached to the bone that it moves.