Which of the Following Situations Will Improve the Current Ratio

question 90

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:

Variable Pay

Tying pay to some measure of individual, group, or organizational performance.

Employee Compensation

The total amount of wages, salaries, and benefits that an employer pays to its employees for their work.

Rate Busting

A term used, particularly in labor, to describe the act of working more quickly or efficiently than the expected or standard rate, which can disrupt agreed-upon wage scales or norms.

Group Incentives

Motivational rewards offered to a group of employees for achieving certain goals or performance benchmarks.