Many Companies Have to Monitor Closely Certain Ratios, Such as the Current

question 148

Essay

Many companies have to monitor closely certain ratios, such as the current ratio, due to debt covenants. Selected transactions are provided below for a company that uses a perpetual inventory system; sells its merchandise at a selling price that exceeds cost; and had a current ratio of 1.85 and a quick ratio of 1.19 before the event occurred.
Required:
In the above table, indicate whether each transaction would increase (+), decrease (-), or not affect (0) the company's current ratio and quick ratio.

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Definitions:

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The process of placing individuals in an institution, such as a psychiatric hospital or prison, where their freedom is severely restricted.

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