When the current ratio is ____ than one and current liabilities ____ by the same dollar amount as current assets,the current ratio ____.
A) less;decrease;increases
B) greater;increase;increases
C) greater;increase;decreases
D) less;increase;decreases

Question

Quizplus · Accepted Answer

When the current ratio is less than one, decreasing both current liabilities and current assets by the same dollar amount increases the current ratio because it reduces the denominator by a larger percentage than the numerator, improving the ratio.

When the Current Ratio Is ____ Than One and Current