Desktop Co

question 77

Multiple Choice

Desktop Co.presently has a current ratio of 1.2 to 1 and an acid-test ratio of 0.8 to 1.What will be effect of prepaying next year's office rent of $50,000?

• A) No effect on either the company's current ratio or its acid-test ratio.
• B) No effect on the company's current ratio but will decrease its acid-test ratio.
• C) A decrease in both the company's current ratio and its acid-test ratio.
• D) An increase in both the company's current ratio and its acid-test ratio.

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Definitions:

Social Loafing

The phenomenon in which each individual contributes a little less as more individuals are added to a task; a source of inefficiency when working in teams.

Recognize Individual

The act of acknowledging and respecting the uniqueness and identity of an individual person.

Group Members

Individuals who belong to a specific collective or organization with shared goals or interests.

Compliance

Adherence to laws, regulations, or specified standards.