As of December 31, 2012, Grove Corporation Had a Current

question 100

Multiple Choice

As of December 31, 2012, Grove Corporation had a current ratio of 1.29, quick ratio of 1.05, and working capital of $18,000. The company uses a perpetual inventory system and sells merchandise for more than it cost. On January 1, 2012, Grove collected $5,200 of accounts receivable. As a result of this transaction, Grove's working capital will:

• A)Increase.
• B)Remain the same.
• C)Decrease.
• D)Cannot be determineD.The transaction will increase one current asset (cash) and decrease another current asset (accounts receivable). Current assets do not change; therefore working capital will not change.

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Definitions:

Scavenging

The act of consuming dead or decaying organic material, a behavior observed in some animals, bacteria, and fungi.

Ectotherm

Animal in which internal temperature is regulated by changes in behavior; for example, a fish or a lizard.

Reptiles

Cold-blooded, vertebrate animals that lay eggs and have skin covered with scales or bony plates.

Metabolic Heat

The heat produced by an organism as a result of its metabolic processes, which helps in maintaining its body temperature.