A firm\'s current ratio would be INCREASED by which of the following? a. Invento

Question

A firm's current ratio would be INCREASED by which of the following?

a. Inventories are sold for cash
b. Equipment is purchased, financed by long term debt issue.
c. Land held for investment is sold for cash
d. Inventories are sold on a credit basis.


A firm's current ratio would be DECREASED by which of the following?

a. Inventories are sold on a long term credit basis
b. Equipment is purchased, financed by a long term debt issue
c. Inventories are sold for cash
d. Land held for investment is sold for cash

Explanation / Answer

C. equipment is purchased, financed by a long-term debt issue

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