A Transaction That Will Increase the Quick Ratio but Cause

question 106

Multiple Choice

A transaction that will increase the quick ratio but cause the current ratio to decline is:

• A) Short-term borrowing.
• B) Investing cash in plant assets.
• C) Sale of inventory at a price below cost.
• D) Collection of an account receivable.

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Definitions:

Plasma Membranes

The membrane found in all cells that separates the interior of the cell from the external environment, providing protection and controlling the movement of substances in and out of the cell.

Lipids

Lipids are a broad group of naturally occurring molecules that include fats, waxes, sterols, fat-soluble vitamins, and other substances, critical for building cell membranes and serving as energy sources.

Water Soluble

Describes a substance that can easily dissolve in water, important for the transport of many nutrients and molecules in the body.

Fuel

Substances that release energy when they undergo a chemical or nuclear reaction, commonly used for heating, powering engines, or generating electricity.