A Company's Current Ratio Is 2

question 48

Multiple Choice

A company's current ratio is 2.0. Which of the following actions would lower the current ratio, assuming everything else remains the same?

• A) Borrow using short-term notes payable and use the proceeds to reduce accruals.
• B) Borrow using short-term notes payable and use the proceeds to reduce long-term debt.
• C) Use cash to reduce accruals.
• D) Use cash to reduce accounts payable.

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