A Company Has the Following Account Balances A) 93
B) 1

question 140

Multiple Choice

A company has the following account balances.What is the acid-test ratio? (Please round to two decimal places.) $\begin{array}{|l|r|}\hline\text { Cash } & \$ 50,000 \\\hline \text { Short-terminvestments } & 85,000 \\\hline \text { Net current receivables } & 120,000 \\\hline \text { Inventory } & 145,000 \\\hline \text { Total current liabilities } & 275,000 \\\hline\end{array}$

• A) .93
• B) 1.45
• C) .64
• D) 1.76

Comprehend the criteria and rationale for using different accounting methods for investments.

Recognize the journal entry recording of bond and stock investments, including the handling of accrued interest and dividends.

Identify and understand different types of investments (equity vs. debt securities).

Understand the concepts of parent and subsidiary companies.

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Definitions:

Encouraging Participation

The act of motivating and creating opportunities for individuals or groups to actively engage and contribute to processes, decision-making, or activities.

Coercive Power

The exertion of control over others by enforcing compliance through fear or threat, distinct from other types of influence.

Punishments

Consequences applied with the intent of reducing or eliminating an undesirable behavior by creating a negative experience.

Authority

This is the legitimate power or right given to an individual or entity to make decisions, direct others, and enforce obedience.