At the beginning of the year,a company's current ratio is 2.2.At the end of the year,the company has a current ratio of 2.5.Which of the following could help explain the change in the current ratio?
A)An increase in inventories.
B)An increase in accounts payable.
C)An increase in property,plant,and equipment.
D)An increase in bonds payable.

Question

Quizplus · Accepted Answer

An increase in inventory would increase the current ratio.An increase in accounts payable would decrease the current ratio.The other two changes would have no effect on the current ratio.

At the Beginning of the Year,a Company's Current Ratio Is