A Indicate the Effect of a Sale of Merchandise on Account

question 135

Essay

a. Indicate the effect of a sale of merchandise on account (on credit) on each of the following items. Assume the selling price exceeds the cost of the inventory. Use "Increase," "Decrease," or "No effect" to express your answer for each, and place your answers in the spaces provided.
$\begin{array}{|l|l|}\hline \text { Current ratio } &\quad\quad\quad\quad \\\hline \text { Quick ratio } & \\\hline \text { Inventory turnover } & \\\hline \text { Asset turnover } & \\\hline\end{array}$
b. Indicate the effect of a payment of an account payable on each of the following items. Assume that the first two ratios exceeded 1.0 before the transaction. Use "Increase," "Decrease," or "No effect" to express your answer for each, and place your answers in the spaces provided.
$\begin{array}{|l|l|}\hline \text { Current ratio } &\quad\quad\quad\quad \\\hline \text { Quick ratio } & \\\hline \text { Return on equity } & \\\hline \text { Receivable turnover } & \\\hline\end{array}$

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Definitions:

Electroreceptors

Specialized cells or organs in some aquatic animals that allow them to detect electric fields in their environment, aiding in navigation, hunting, and communication.

Mechanoreceptors

Sensory receptors in the body that respond to mechanical pressure or distortion, crucial for senses like touch and hearing.

Thermoreceptors

Sensory receptors in the body that detect changes in temperature, helping to maintain homeostasis.

Sensory Adaptation

The process by which sensory receptors become less responsive to constant stimuli, allowing focus on changes in the environment.