Considered alone,which of the following would increase a company's current ratio?
A)an increase in net fixed assets
B)an increase in accrued liabilities
C)an increase in notes payable
D)an increase in accounts receivable

Question

Quizplus · Accepted Answer

The current ratio is calculated by dividing current assets by current liabilities. An increase in accounts receivable (current asset) would increase the numerator of the ratio, while the denominator (current liabilities) remains the same, causing the current ratio to increase. An increase in net fixed assets (non-current asset) would not affect the current ratio. An increase in accrued liabilities or notes payable (current liabilities) would decrease the current ratio.

Considered Alone,which of the Following Would Increase a Company's Current