Friday, October 9, 2020

Which of the following is NOT possible for a business transaction?

Which of the following is NOT possible for a business transaction?


A) Increase assets and decrease revenue.

B) Decrease assets and increase expenses.

C) Increase liabilities and increase expenses.

D) Decrease liabilities and increase revenue.


Answer: A

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Assuming a current ratio of 1.2 and an acid-test ratio of 0.80, how will the purchase of inventory with cash affect each ratio?

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