An increase in current asset accompanied by the increase in current liabilities of the same amount will…………………
A)improve short term financial position
B)not improve short term financial position
C)improve long term financial position
D)none of these

Question

Quizplus · Accepted Answer

An increase in current assets accompanied by an increase in current liabilities of the same amount does not improve the short-term financial position because the ratio of current assets to current liabilities remains unchanged, indicating no improvement in liquidity or the ability to meet short-term obligations.

An Increase in Current Asset Accompanied by the Increase in Current