ABC Inc Has Determined That It Needs to Increase Its Current

question 60

Multiple Choice

ABC Inc. has determined that it needs to increase its current ratio in order to be in compliance with a creditor's loan agreement. All else being equal, which of the following ways would be best for increasing their current ratio?

• A) Increasing long-term assets
• B) Decreasing current assets
• C) Decreasing current liabilities
• D) Increasing long-term liabilities

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Definitions:

Good Faith

Conducting oneself with honesty and sincerity without intending to defraud or deceive others.

Preprinted Promissory Note

A standardized, fill-in-the-blank form that evidences a promise to pay a specified amount of money to a named party under agreed terms.

Payable

Refers to amounts of money that a business or individual owes to another party and is required to pay, typically within a specified period.

Forge

To create a fake version of something, such as a document or signature, with the intent to deceive.