Assuming a Current Ratio of 1

question 110

Multiple Choice

Assuming a current ratio of 1.0 and an acid-test ratio of 0.75,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)Increase the current ratio and decrease the acid-test ratio.

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Definitions:

Knowledgeable About Food

Refers to having a comprehensive understanding about food, including its preparation, nutritional value, and cultural significance.

Considerable Depth

A thorough and detailed examination or analysis of a subject or issue.

Sporting Goods Categories

Classifications of products related to sports and physical activities, encompassing equipment, apparel, and accessories.

Limited-Line Stores

Retail outlets that specialize in a limited number of product lines or categories, offering deep assortments within those lines.