Which of the Following Transactions Will Increase the Current Ratio

question 80

Multiple Choice

Which of the following transactions will increase the current ratio (assuming the ratio is initially greater than 1) ?

• A) purchasing inventory on credit
• B) selling inventory for more than cost
• C) buying office supplies
• D) collecting accounts receivable

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Definitions:

Injured Party

A person or entity that has suffered harm or damage due to the actions or negligence of another, and may be entitled to compensation or remedy under the law.

State Tort Law

The body of law at the state level in the United States that governs civil wrongs and damages, outside of contractual obligations, allowing victims to seek compensation.

Federal Statute

A law enacted by the national government of a country.

Compliance

The act of following, adhering to, or being in accordance with established guidelines, specifications, or legislation.