Which of the Following Could Explain a Substantial Increase in the Current

question 21

Multiple Choice

Which of the following could explain a substantial increase in the current ratio (presently 1:1) ?

• A) Purchase of inventory for cash
• B) Sale of a major noncurrent asset near year-end
• C) A large prepayment near year-end
• D) A cash deposit received for work to be done next year

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