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:

Controlling

The process of monitoring, evaluating, and influencing an organization's activities to achieve its objectives.

Expected Results

Anticipated outcomes or predictions made about future events or performances, often based on statistical analysis or forecasting methods.

Developing Products

The process of creating new products or significantly improving existing ones, which involves research, design, and development stages.

Diagonals

In geometry, straight lines connecting non-adjacent corners of a polygon or polyhedron. In finance, an options strategy combining different expiration dates and strike prices.