Use the Information Below to Answer the Following Questions

question 11

Multiple Choice

Use the information below to answer the following questions:
Unstable Ltd has decided to change its depreciation method from straight-line to reducing balance, with the agreement of its auditors and taxation authorities. As a result, its annual depreciation expense increases by $200,000. The company’s income tax rate is 40%.
-Which of the following could explain a decrease in the quick ratio?

• A) a change from FIFO to LIFO
• B) a change in the depreciation method used
• C) slow-moving inventory
• D) increase in accounts payable

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Definitions:

Imperial Palace

The official residence of an emperor or empress, often grandiose and lavishly decorated, symbolizing the sovereign's power and status.

Forbidden City

A large imperial palace complex in Beijing, China, that served as the home of emperors and their households for almost 500 years, showcasing traditional Chinese palatial architecture.

Ming

A major Chinese dynasty that ruled from 1368 to 1644, known for its cultural achievements and expansion of the Great Wall of China.

Literati Painting

A style of Chinese painting done by highly educated scholars or literati, that values personal expression and minimalistic aesthetics over realistic representation.