Question
Zack Company has a current ratio of 2.5. What will be the effect of a purchase of inventory with cash on the acid-test ratio and
Zack Company has a current ratio of 2.5. What will be the effect of a purchase of inventory with cash on the acid-test ratio and on working capital?
| Acid-Test Ratio | Working Capital | |
| A) | decrease | decrease |
| B) | decrease | no effect |
| C) | no effect | decrease |
| D) | no effect | no effect |
Multiple Choice
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Choice A
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Choice B
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Choice C
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Choice D
What is the correct answer?
Zack Company has a current ratio of 2.5. What will be the effect of a purchase of inventory with cash on the acid-test ratio and on working capital? Acid-Test Ratio Working Capital decrease decrease decrease no effect no effect decrease no effect no effect O 0 Choice B (C) Choice C 0 Choice DStep by Step Solution
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Building Accounting Systems Using Access 2010
Authors: James Perry, Richard Newmark
8th Edition
1111530998, 978-1111530990
