Assume the Current Ratio Is 3 to 1

question 146

Multiple Choice

Assume the current ratio is 3 to 1.Estimating the warranties expense on the period's sales would cause the current ratio to

• A)increase.
• B)decrease.
• C)be unchanged since the effects offset one another.
• D)be unchanged since it has no effect on any current accounts.

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Definitions:

Negotiable

Capable of being discussed and terms arranged; a check is a negotiable instrument drawn against deposited funds to pay a specified amount to a person or business upon demand.

Form Of Phrase

The particular way in which a phrase is constructed or expressed.

Pay To The Order Of

A phrase written on checks to designate who has the authority to receive the amount specified on the check.

Use Of Checks

The practice of using checks as a method of payment; involves writing, issuing, or receiving checks as a way to transfer money.