Use the information below to answer the following questions:
Unstable Ltd has decided to change its depreciation method from straight-line to reducing balance, with the agreement of its auditors and taxation authorities. As a result, its annual depreciation expense increases by $200,000. The company’s income tax rate is 40%.
-Which of the following could explain a decrease in the quick ratio?
A) a change from FIFO to LIFO
B) a change in the depreciation method used
C) slow-moving inventory
D) increase in accounts payable

Question

Use the information below to answer the following questions:
Unstable Ltd has decided to change its depreciation method from straight-line to reducing balance, with the agreement of its auditors and taxation authorities. As a result, its annual depreciation expense increases by $200,000. The company’s income tax rate is 40%. 
-Which of the following could explain a decrease in the quick ratio?
A) a change from FIFO to LIFO
B) a change in the depreciation method used
C) slow-moving inventory
D) increase in accounts payable

Quizplus · Accepted Answer

The Answer of Use the information below to answer the following questions:
Unstable Ltd has decided to change its depreciation method from straight-line to reducing balance, with the agreement of its auditors and taxation authorities. As a result, its annual depreciation expense increases by $200,000. The company’s income tax rate is 40%. 
-Which of the following could explain a decrease in the quick ratio?
A) a change from FIFO to LIFO
B) a change in the depreciation method used
C) slow-moving inventory
D) increase in accounts payable

Use the Information Below to Answer the Following Questions