Which of the following transactions would increase the current ratio of a company if the ratio is currently more than 1 to 1?
A)Paid the principal on a long-term note payable.
B)Borrowed cash on a short-term note.
C)Sold inventory for more than cost.
D)Record amortization expense.

Question

Quizplus · Accepted Answer

Selling inventory for more than cost would increase the company's current assets, which would increase the current ratio. The other transactions listed would either decrease current assets or increase current liabilities, resulting in a decrease in the current ratio.

Which of the Following Transactions Would Increase the Current Ratio