Zack Company Has a Current Ratio of 2

question 65

Multiple Choice

Zack Company has a current ratio of 2.5. What will be the effect of a purchase of inventory with cash on the acid-test ratio and on working capital?

• A)Option A
• B)Option B
• C)Option C
• D)Option D

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Definitions:

Private Company

A business entity owned by private individuals or corporations, with shares that are not traded publicly on stock exchanges.

Closing Date

The specific date agreed upon by parties involved in a transaction (such as the sale of property) when the transaction is finalized and legal documents are signed.

Campaign Buttons

Small pins or badges distributed by political campaigners to show support for a specific candidate, party, or political cause.

Cheque Bounces

Occurs when a bank refuses to honor a check due to insufficient funds or because the account is closed.