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:

Organizational Flexibility

The ability of an organization to adapt and respond to changing conditions or opportunities in its internal and external environment.

Diversity

The inclusion of individuals from various backgrounds, cultures, genders, races, ages, abilities, and other unique attributes within a group or organization.

Cohesiveness

The degree to which members of a group or team are attracted to each other and motivated to stay in the group.

Cultural Relativism

The principle that an individual's beliefs and activities should be understood by others in terms of that individual's own culture.