Your Company Has Just Sold Some Inventory

question 117

Multiple Choice

Your company has just sold some inventory.What impact does this have on the company's current ratio?

• A)There is no impact; the current ratio remains the same.
• B)The current ratio will increase as a result of sale.
• C)The current ratio will decline as a result of the sale.
• D)More information is needed to determine the impact.

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Definitions:

Furlong v. Alpha Chi Omega

A specific legal case or controversy, but without further detail, its significance cannot be determined. If it's a real case, it would be related to a legal dispute involving the parties named.

Shipment Contract

A legal agreement specifying that the seller will bear the risk of loss or damage to the goods until they are delivered to the carrier.

Ex-Ship

A term from international trade indicating that the seller's responsibility ends once the goods are available for unloading from the ship at the destination port.

F.O.B.

A shipping term indicating that the seller is responsible for the cost of loading goods onto a vessel, with the buyer assuming the risk and transportation cost once onboard.