Considered Alone, Which of the Following Would Increase a Company's

question 50

Multiple Choice

Considered alone, which of the following would increase a company's current ratio?

• A) An increase in accounts payable.
• B) An increase in net fixed assets.
• C) An increase in accrued liabilities.
• D) An increase in notes payable.
• E) An increase in accounts receivable.

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Definitions:

Average Total Assets

A measure that calculates the mean value of a company's assets over a specific period, often used to assess how efficiently these assets are used.

Net Sales

The total revenue from goods or services sold less returns, allowances, and discounts.

Book Value

The value of an asset according to its balance sheet account balance, taking into account the cost of the asset minus any depreciation.

Fair Value

An estimate of the market value of an asset, based on what a knowledgeable, willing, and unpressured buyer would likely pay to a knowledgeable, willing, and unpressured seller in the market.