Other Things Held Constant,an Increase in ________ Will Decrease the Current

question 31

Multiple Choice

Other things held constant,an increase in ________ will decrease the current ratio.Assume an initial current ratio greater than 1.0.

• A)accruals
• B)ordinary shares
• C)average collection period
• D)cash

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Definitions:

Operating Income

Earnings before interest and taxes, presenting a company's profit from regular operational activities.

Fixed Costs

Fixed Costs are business expenses that remain constant regardless of the level of production or sales activities, such as rent and salaries.

Sales Mix

The proportion of different products or services that a company sells, influencing overall sales and profitability.

Variable Costing

An accounting method that only considers variable costs (costs that change with production volume) when calculating the cost of goods sold and in the determination of profitability.