Assume That a Company's Current Ratio Is 2

question 126

Multiple Choice

Assume that a company's current ratio is 2.0. If the company purchases inventory on credit, which of the following is true?

• A)The current ratio will increase.
• B)The current ratio will decrease.
• C)There will be no net impact on the current ratio.
• D)The current ratio will change, but there will be no effect on the quick ratio.

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