Assuming a Current Ratio of 1

question 100

Multiple Choice

Assuming a current ratio of 1.2 and an acid-test ratio of 0.80,how will the purchase of inventory with cash affect each ratio?

• A)Increase the current ratio and increase the acid-test ratio.
• B)No change to the current ratio and decrease the acid-test ratio.
• C)Decrease the current ratio and decrease the acid-test ratio.
• D)Decrease the current ratio and increase the acid-test ratio.

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Definitions:

Reference Dimension

A non-critical dimension provided for information only and does not govern production or inspection processes.

Abbreviation REF

A shortened form of a word or phrase used for brevity and clarity, particularly in reference material.

T Slot

A slot or channel shaped like the letter "T," designed to accept and hold a T-head bolt or nut, commonly used in workbenches, machine tables, and other fixtures.

Dovetail

A joining technique utilizing interlocking tenons and mortises resembling a dove's tail, commonly used in woodworking for strong, precise fits.