How Would the Quick Ratio Be Affected by a Prepayment

question 9

Multiple Choice

How would the quick ratio be affected by a prepayment of $30,000 for fire and liability insurance?

• A) The quick ratio would decrease.
• B) The quick ratio would increase.
• C) The quick ratio would not change.
• D) The effect cannot be determined from the information given.

---

Definitions:

Functional

Relating to the purpose or role that something is designed or expected to fulfill.

Deviance

Behaviors or actions that deviate from societal norms or expectations, which can be formal (laws) or informal (customs).

Émile Durkheim

A foundational French sociologist known for his extensive work on social solidarity, the division of labor, and the role of religion in society, among other contributions.

Strain Theory

A sociological theory that suggests individuals may engage in deviant behavior when they experience a discrepancy between societal goals and the means available to achieve those goals.