All of the Following Are Ways That a Company's Current

question 97

Multiple Choice

All of the following are ways that a company's current ratio would decrease except

• A) purchasing inventory on account.
• B) adding equal amounts to the numerator and denominator.
• C) paying off one-third of its accounts payable.
• D) paying cash for new equipment.

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Definitions:

Stocks

Shares of ownership in a corporation, representing a claim on the company's assets and earnings.

Bonds

Financial securities that represent a loan made by an investor to a borrower, typically corporate or governmental, which pays interest over time and returns the principal at maturity.

Forgoing Benefits

The benefits that are lost when choosing one alternative over another; also known as opportunity cost.

Present Benefits

Advantages or positive outcomes that are received or enjoyed currently, as opposed to in the future.