Assuming a Current Ratio of 1

question 105

Multiple Choice

Assuming a current ratio of 1.2 and an acid-test ratio of 0.80,how will the purchase of inventory with cash affect each ratio?

• A)Increase the current ratio and increase the acid-test ratio.
• B)No change to the current ratio and decrease the acid-test ratio.
• C)Decrease the current ratio and decrease the acid-test ratio.
• D)Decrease the current ratio and increase the acid-test ratio.

---

Definitions:

Paraphrasing

Restating someone's words or ideas in one's own words without changing the original meaning.

Reflection

The act of thinking deeply or carefully about something, often regarding one's actions, beliefs, or experiences.

Restates Content

A communication technique where the speaker repeats what has been said in their own words, often used to confirm understanding or clarify information.

Rephrases Feelings

The process of rewording or restating someone's emotional expressions to confirm understanding or to provide comfort.