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.

---

Definitions:

Retrograde Amnesia

A loss of memory-access to events that occurred, or information that was learned, before an injury or the onset of a disease.

Motivated Forgetting

A psychological theory that suggests individuals may forget unwanted memories, either consciously or unconsciously, due to the memories being distressful or threatening.

Anxiety-Arousing Memories

Recollections of past events that trigger feelings of fear, worry, or apprehension.

Repression

In psychoanalytic theory, the basic defense mechanism that banishes from consciousness anxiety-arousing thoughts, feelings, and memories.