Which of the Following Actions Could Improve a Firm's Current

question 27

Multiple Choice

Which of the following actions could improve a firm's current ratio if it is now less than 1.0?

• A) Converting marketable securities to cash
• B) Paying accounts payable with cash
• C) Buying inventory on credit
• D) Selling inventory at cost

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Definitions:

Notes Payable

An accounting term for amounts owed by a business that are evidenced by promissory notes.

Borrower

An individual or entity that receives something with the agreement to return it or its equivalent to the lender at a later date.

Sales Taxes

Taxes levied by government on the sale of goods and services, typically calculated as a percentage of the sale price.

Sales Revenues

The revenue a company earns from selling products or offering services.