Windham Corporation Has Current Assets of $400,000 and Current Liabilities

question 18

Multiple Choice

Windham Corporation has current assets of $400,000 and current liabilities of $500,000. Windham Corporation's current ratio would be increased by:

• A) the purchase of $100,000 of inventory on account.
• B) the payment of $100,000 of accounts payable.
• C) the collection of $100,000 of accounts receivable.
• D) refinancing a $100,000 long-term loan with short-term debt.

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Definitions:

Flow of Finance

Refers to the movement of money among various participants in an economy including institutions, markets, individuals, and governments.

Learning by Doing

A theory that suggests proficiency and efficiency improve over time through practice and hands-on experience.

Regional Level

Refers to the geographical tier that encompasses localities within a larger national or international context, focusing on specific area-based initiatives or characteristics.

Smaller Firms

Refers to businesses that are relatively small in size, often characterized by fewer employees, lower annual revenues, and limited market share compared to larger corporations.