Which of the Following Situations Will Improve the Current Ratio

question 25

Multiple Choice

Which of the following situations will improve the current ratio if it is initially less than 1.0?

• A)using cash to repay accounts payable
• B)purchasing inventory on credit terms
• C)selling finished goods inventory on credit
• D)purchasing marketable securities for cash

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Definitions:

Written Word

Information or content that is expressed in written form, as opposed to spoken word or other modes of communication.

Advertised Reward

An offer of payment published to the general public for the performance of a specific task, such as information leading to the recovery of lost property.

Express Mail

Express Mail is a service that provides expedited mail delivery, often guaranteeing delivery by a specific time the following day or within a specified period.

Acceptance

In contract law, the agreement by a party to the terms of an offer, thereby creating a binding contract.