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AIWMI CCRA-L2 Exam - Topic 1 Question 114 Discussion

If XYZ Ltd. incurs (with purchase and installation of machinery) using cash, which of the following ratios will remain unchanged, if all other things remain constant?
C) Current Ratio
A) None of the three
B) Asset Turnover ratio
D) Quick Ratio

AIWMI CCRA-L2 Exam - Topic 1 Question 114 Discussion

Actual exam question for AIWMI's CCRA-L2 exam
Question #: 114
Topic #: 1
[All CCRA-L2 Questions]

If XYZ Ltd. incurs (with purchase and installation of machinery) using cash, which of the following ratios will remain unchanged, if all other things remain constant?

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Suggested Answer: C

by Billi at Jul 09, 2025, 01:58 PM

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Lettie
6 months ago
Wait, how can none of the ratios change? That seems off!
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Shanda
6 months ago
Asset Turnover ratio is definitely affected by this.
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Rosann
6 months ago
Totally agree, Current Ratio is unaffected!
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Rory
7 months ago
I think the Quick Ratio might change though, right?
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Charlette
7 months ago
Current Ratio stays the same since cash and machinery are both assets.
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Lynelle
7 months ago
I feel like none of the ratios would remain unchanged since cash is being spent, but I need to double-check my notes on that.
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Miss
7 months ago
I practiced a similar question where the asset turnover ratio was mentioned, but I can't remember if it stays the same when cash is involved.
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Verda
8 months ago
I think the current ratio will definitely change because cash is being used up, but I can't recall if the quick ratio would be affected in the same way.
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Elly
8 months ago
I remember that the asset turnover ratio might change since we're adding machinery, but I'm not sure how cash affects it.
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Mindy
8 months ago
Yeah, I agree with that logic. I think the only ratio that would change is the debt-to-equity ratio, since the cash outflow would decrease the equity. But the question is asking about which ratios remain unchanged, so the answer is B.
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William
8 months ago
I'm pretty confident the asset turnover ratio would also remain unchanged. The increase in non-current assets would be offset by the cash outflow, so the total assets wouldn't change.
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Leatha
8 months ago
Okay, let's see. The purchase and installation of machinery using cash would increase the company's non-current assets, but it wouldn't affect the current assets or liabilities. So I think the current ratio and quick ratio would remain unchanged.
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Judy
8 months ago
I'm not entirely sure about this one. I'll need to think through the impact on the different ratios carefully.
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France
10 months ago
I think the answer is B) Asset Turnover ratio because it is not directly affected by cash transactions.
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Jillian
10 months ago
This is a classic trick question. The key is that 'all other things remain constant', so the asset turnover ratio is the only one unaffected.
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Carin
9 months ago
A) None of the three
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Jerry
10 months ago
I'm not sure, but I think the answer might be A) None of the three.
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Royal
10 months ago
I disagree, I believe the answer is D) Quick Ratio.
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Lavera
10 months ago
Ha! Looks like the correct answer is B. I bet the other candidates are scratching their heads on this one.
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Herminia
9 months ago
I was torn between B and C, but now I see why it's B.
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Maybelle
9 months ago
Yeah, that makes sense. Cash doesn't affect that ratio.
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Quentin
10 months ago
I think it's B) Asset Turnover ratio.
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Carri
10 months ago
I think the answer is C) Current Ratio.
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Lindsey
11 months ago
I'm pretty sure the current and quick ratios would be affected since cash is being used. This is a tricky one!
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Hobert
10 months ago
B) Asset Turnover ratio
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Carey
11 months ago
I think the Asset Turnover ratio would remain unchanged.
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Rozella
11 months ago
A) None of the three
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Catalina
11 months ago
The asset turnover ratio should remain unchanged, as the machinery purchase would increase both assets and sales proportionately.
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Cherelle
11 months ago
C) Current Ratio
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Dannette
11 months ago
B) Asset Turnover ratio
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Johnson
11 months ago
A) None of the three
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