If a Company Has a Current Ratio of 2 to 1,and

question 30

Multiple Choice

If a company has a current ratio of 2 to 1,and purchases inventory on credit,what will this do to its current ratio?

• A)Increase the current ratio.
• B)Decrease the current ratio.
• C)Does not change the current ratio.
• D)Cannot be determined.

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Definitions:

Unfunded Mandates

Regulations or mandates imposed by higher levels of government without providing the necessary funding to fulfill them.

Tenth Amendment

An amendment to the U.S. Constitution that reserves powers not delegated to the federal government to the states or to the people.

Necessary and Proper Clause

A provision in the U.S. Constitution granting Congress the power to pass all laws necessary and proper for carrying out its enumerated powers.

Creative Federalism

A form of federalism prevalent in the 1960s where the federal government determined the needs of the states and provided services, often leading to an expansion of federal government powers.