Which of the following would help a company improve its quick ratio without necessarily lowering the liability risk to a creditor?
A) Borrowing money on a long-term note just before the end of the accounting period.
B) Shifting resources from long-term assets to short-term assets such as supplies and inventory.
C) Shifting obligations from long-term liabilities to short-term liabilities.
D) Acquiring inventory by issuing a long-term note.

Question

Quizplus · Accepted Answer

Borrowing money on a long-term note increases cash (a quick asset) without increasing current liabilities, thus improving the quick ratio without affecting the liability risk to a creditor.

Which of the Following Would Help a Company Improve Its