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A Firm Has a Current Ratio Greater Than 1 A) Option a
B) Option B
C) Option C
D)

question 33

Multiple Choice

A firm has a current ratio greater than 1.0. If the firm's ending inventory is understated by $3,000 and beginning inventory is overstated by $5,000, the firm's net income (before taxes) and current ratio will be:  Net Income  Current Ratio  A)   understated by $2,000 too low  B)   overstated by $2,000 too low  C)   understated by $8,000 too low  D)   understated by $8,000 too high \begin{array} { | l | l | l | } \hline & { \text { Net Income } } & \text { Current Ratio } \\\hline \text { A) } & \text { understated by } \$ 2,000 & \text { too low } \\\hline \text { B) } & \text { overstated by } \$ 2,000 & \text { too low } \\\hline \text { C) } & \text { understated by } \$ 8,000 & \text { too low } \\\hline \text { D) } & \text { understated by } \$ 8,000 & \text { too high } \\\hline\end{array}

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Definitions:

Loop Of Henle

A long, U-shaped portion of the tubule that conducts urine within each nephron of the kidney of mammals and birds.

Permeable

A characteristic of materials that allows liquids or gases to pass through them, often referring to the selective permeability of biological membranes to certain substances.

Efferent Arterioles

Small blood vessels that carry blood away from the glomeruli of the kidney.

Peritubular Capillaries

Tiny blood vessels that travel alongside nephrons allowing reabsorption and secretion between blood and the inner lumen of the nephron.

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