How Would the Quick Ratio Be Affected by a Prepayment

question 9

Multiple Choice

How would the quick ratio be affected by a prepayment of $30,000 for fire and liability insurance?

• A) The quick ratio would decrease.
• B) The quick ratio would increase.
• C) The quick ratio would not change.
• D) The effect cannot be determined from the information given.

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Definitions:

Pure Contributory Negligence

A legal doctrine where a damaged party cannot recover any damages if they are found to be even slightly at fault.

Mixed Contributory

"Mixed Contributory" could refer to scenarios involving mixed contributory negligence, where multiple parties are found to be at fault in varying degrees for a particular incident or loss, but without more context, the precise definition can vary.

Criminal Negligence

Criminal negligence refers to a behavior that is recklessly disregardful of the safety or lives of others, and is characterized by a failure to exercise the care that a reasonably prudent person would under the same circumstances.

Assumption of Risk

A legal principle where an individual acknowledges and accepts the potential risks involved in an activity, which may limit their rights to claim damages in the event of injury.