Which of the following would result in an increase in the current ratio,but not necessarily the acid-test ratio?
A)Increase in current assets
B)Increase in quick assets
C)Decrease in current liabilities

Question

Quizplus · Accepted Answer

Increasing current assets will increase the current ratio (current assets divided by current liabilities), but it may or may not increase the acid-test ratio (quick assets divided by current liabilities) depending on whether the increase in current assets is in the form of quick assets (cash, marketable securities, and receivables) or other current assets (such as inventory).

Which of the Following Would Result in an Increase in the Current