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.

Question

Quizplus · Accepted Answer

Since inventory is excluded from the numerator in the acid-test ratio,with the denominator increasing through the incursion of additional accounts payable,the ratio would decrease.

Park Company Purchased $100,000 in Inventory from Its Suppliers,on Account