Which of the following activities will increase a firm's current ratio?
A) purchase inventory using cash
B) buy equipment with a short-term bank loan
C) accrued wages and taxes increase
D) none of these statements will increase a firm's current ratio

Question

Quizplus · Accepted Answer

The current ratio is calculated as current assets divided by current liabilities. None of the options provided (A, B, C) increase a firm's current assets without also increasing its current liabilities or decreasing its current assets, which would not lead to an increase in the current ratio.

Which of the Following Activities Will Increase a Firm's Current