Which of the following would not result in an increase in both the current ratio and the acid-test ratio?
A)Increase in cash
B)Increase in inventory
C)Increase in accounts receivable

Question

Quizplus · Accepted Answer

An increase in inventory would increase the current ratio (as inventory is included in current assets) but decrease the acid-test ratio (as inventory is not included in the acid-test ratio calculation). Therefore, choice B is the best answer as it would not result in an increase in both ratios.

Which of the Following Would Not Result in an Increase