Which of the Following Actions Will Cause an Increase in the Quick

question 65

Multiple Choice

Which of the following actions will cause an increase in the quick ratio in the short run?

• A) $1,000 worth of inventory is sold,and an account receivable is created.The receivable exceeds the inventory by the amount of profit on the sale,which is added to retained earnings.
• B) A small subsidiary which was acquired for $100,000 two years ago and which was generating profits at the rate of 10 percent is sold for $100,000 cash.(Average company profits are 15 percent of assets. )
• C) Marketable securities are sold at cost.
• D) All of the above.
• E) Answers a and b above.

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Definitions:

One-tailed Hypothesis

A hypothesis test that considers either a decrease or an increase in a specific direction, focusing on one end of the probability distribution.

Valid Hypothesis

A hypothesis that is well-founded, testable, and grounded in existing scientific evidence or observations.

Two-tailed Hypothesis

A statistical test hypothesis that considers both directions of effect, allowing for testing differences in either direction.

Degrees of Freedom

The count of individual values or magnitudes that may be allocated to a statistical distribution without breaking any limitations.