In the left-hand column, a series of independent transactions is listed; in the right-hand column, a series of ratios is listed.

*include only if this topic was covered in a prior chapter
Required: For each transaction indicate whether the ratio will increase, decrease, or remain unchanged. Assume all ratios are greater than 1:1 before each transaction where applicable.

Transcribed Image Text:

Effect on ratio Ratio Current ratio Accounts receivable collection period Acid-test ratio Return on total assets Increase Decrease change Transaction Declared a cash dividend Wrote-off an uncollectible account receivable Purchased inventory on account Issued 10-year bonds to acquire capital assets Issued additional shares for cash Debt to shareholders' equity ratio Declared a share dividend on Earnings per share common shares Restricted part of retained earnings Return on Purchased supplies on account Paid a short-term creditor in full Paid an account payable, taking the shareholders' equity Current ratio Acid-test ratio Number of days of cash discount sales in inventory