Use the Table for the Question(s)below

question 28

Multiple Choice

Use the table for the question(s) below.
Statement of Financial Position

-If the above statement of financial position is for a retail company,what indications about this company would best be drawn from the changes in quick ratio between 2014 and 2015?

• A)The company has eliminated the risk that it will experience a cash shortfall in the near future.
• B)The company has reduced the risk that it will experience a cash shortfall in the near future.
• C)The risk that the company will experience a cash shortfall in the near future is unchanged.
• D)The company has increased the risk that it will experience a cash shortfall in the near future.
• E)The company has greatly reduced the risk that it will experience a cash shortfall in the near future.

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Definitions:

Prepaid Expense

An expense that has been paid in advance and is recorded as an asset until it is actually incurred.