If a Company Has an Acid-Test Ratio of 1

question 77

Multiple Choice

If a company has an acid-test ratio of 1.2, what respective effects will the borrowing of cash by short-term debt and the collection of accounts receivable have on the ratio? Short-term Collection of
Borrowing Receivable

• A) Increase No effect
• B) Increase Increase
• C) Decrease No effect
• D) Decrease Decrease

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Definitions:

Biasing Power

The influence or tendency to skew judgment or decision-making in a particular direction, often unconsciously.

External Disorders

Conditions or disorders that primarily manifest through physical or observable symptoms, often affecting the body's external features or behaviors.

Anxiety

A feeling of worry, nervousness, or unease about something with an uncertain outcome, often reflecting a concern over future events.

Depression

A common mental health disorder characterized by persistent sadness, loss of interest in activities, and a range of physical and emotional problems.