Assume a Company Has a Current Ratio That Is Greater

question 197

Multiple Choice

Assume a company has a current ratio that is greater than 1.Which of the following transactions will reduce the company's current ratio?

• A)Selling office equipment at book value.
• B)Paying a cash dividend already declared.
• C)Borrowing by taking out a short-term loan.
• D)Selling equipment at a loss.

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Definitions:

Air Suspension System

A type of vehicle suspension powered by an electric or engine-driven air pump or compressor, which pumps air into flexible bellows, typically made from textile-reinforced rubber.

Height Control Valve

A component in air suspension systems of vehicles that adjusts the ride height by controlling the air flow into or out of the air suspension bags.

Progressive Leaf Spring

A type of leaf spring suspension featuring leaves of varying lengths stacked together, providing a more comfortable ride by adjusting to load and road conditions progressively.

Pneumatic

Refers to technology or devices operated by compressed air or gas.