The current ratio would normally be increased by
A)paying off some current liabilities with cash
B)selling bonds and investing the proceeds in marketable securities
C)buying treasury stock
D)paying off some current liabilities with cash and selling bonds and investing the proceeds in marketable securities

Question

Quizplus · Accepted Answer

Paying off current liabilities with cash reduces both current assets and current liabilities, but the ratio increases if liabilities decrease more. Selling bonds and investing in marketable securities increases current assets without affecting current liabilities, thus increasing the ratio.

The Current Ratio Would Normally Be Increased by