If a Firm's Current Ratio Exceeds 1

question 33

Multiple Choice

If a firm's current ratio exceeds 1.0, what happens as a result of paying cash to reduce accounts payable?

• A)net working capital increases
• B)net working capital decreases
• C)current ratio increases
• D)current ratio decreases

---

Definitions:

Contracting

The process of making formal agreements or contracts, often relating to services, employment, or legal obligations.

Administration Support

The assistance and resources provided by administrative staff to ensure the efficient operation and success of programs or organizations.

Potential Members

Individuals who may become part of a group, organization, or system but have not yet joined or been formally incorporated.

Sponsoring Organization

An entity or group that supports a project or program, often providing funding or resources.