Park Company purchased $100,000 in inventory from its suppliers, on account. The

Question

Park Company purchased $100,000 in inventory from its suppliers, on account. The company's acid-test ratio would: A) increase. B) decrease. C) remain unchanged. D) be impossible to determine from the given information. AND Fraser Company had $130,000 in sales on account last year. The beginning accounts receivable balance was $10,000 and the ending accounts receivable balance was $14,000. The company's accounts receivable turnover was closest to: A) 5.42 B) 13.00 C) 9.29 D) 10.83 AND A company's current ratio and acid-test ratios are both greater than 1. The collection of a current accounts receivable of $29,000 would: A) increase the current ratio. B) decrease the current ratio. C) not affect the current ratio or the acid-test ratio. D) decrease the acid-test ratio.

Explanation / Answer

B A C

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