Which of the following activities will increase a firm's current ratio?
A) sale of inventory for a profit
B) buy equipment with a long-term bank loan
C) pay the current month's rent

Name: Which of the following activities will increase a firm's current ratio? A) sale of inventory for a profit B) buy equipment with a long-term bank loan C) pay the current month's rent
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Question

Quizplus · Accepted Answer

Selling inventory for a profit increases current assets (cash) without affecting current liabilities, thus increasing the current ratio.

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