For A-H select I for Increase, D for Decrease, or NE for No Effect. Assume: Current Ratio and Quick Ratio are both above 1.0 and ROA is below 1.0 prior to any transaction. All transactions are treated independently.

A) Purchase inventory on credit.

B) Accrue (record) electricity expense without paying the electricity bill yet.

C) Pay off (reimburse) short-term notes payable with cash.

D) Declare and pay cash dividends.

E) Collecting cash from credit customers.

F) Issuance of common stock for cash.

G) Return defective inventory to suppliers (no cash back is received, instead accounts payable is reduced).

H) Purchase equipment by issuing long-term loan.

Answer rating: 100% (QA)

Solution Current Ratio Quick Ratio Effect Current Assets ... View the full answer