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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
3 months ago
Wait, how can none of the ratios change? That seems off!
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Shanda
3 months ago
Asset Turnover ratio is definitely affected by this.
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Rosann
3 months ago
Totally agree, Current Ratio is unaffected!
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Rory
4 months ago
I think the Quick Ratio might change though, right?
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Charlette
4 months ago
Current Ratio stays the same since cash and machinery are both assets.
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Lynelle
4 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
4 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
5 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
5 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
5 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
5 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
5 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
5 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
7 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
7 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
6 months ago
A) None of the three
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Jerry
7 months ago
I'm not sure, but I think the answer might be A) None of the three.
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Royal
7 months ago
I disagree, I believe the answer is D) Quick Ratio.
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Lavera
7 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
6 months ago
I was torn between B and C, but now I see why it's B.
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Maybelle
6 months ago
Yeah, that makes sense. Cash doesn't affect that ratio.
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Quentin
7 months ago
I think it's B) Asset Turnover ratio.
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Carri
7 months ago
I think the answer is C) Current Ratio.
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Lindsey
8 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
7 months ago
B) Asset Turnover ratio
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Carey
8 months ago
I think the Asset Turnover ratio would remain unchanged.
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Rozella
8 months ago
A) None of the three
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Catalina
8 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
8 months ago
C) Current Ratio
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Dannette
8 months ago
B) Asset Turnover ratio
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Johnson
8 months ago
A) None of the three
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