Assume That a Firm Issues a Six-Month Note to Purchase

question 120

Multiple Choice

Assume that a firm issues a six-month note to purchase inventory.Which of the following is true if the current ratio before the purchase is 1.0?

• A) The firm's current ratio must decrease.
• B) The firm's quick ratio will stay the same.
• C) The firm's current ratio will increase.
• D) The firm's quick ratio might decrease.

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