Which one of the following transactions will increase the liquidity of a firm? a

Question

Which one of the following transactions will increase the liquidity of a firm? a. issuing long-term debt to repurchase shares of outstanding stock b. selling inventory on credit c. increasing short-term debt while decreasing long-term debt by an equivalent amount d. using cash to purchase new equipment e. increasing the sales on credit while reducing cash sales by the same amount Which one of the following transactions will increase the liquidity of a firm? a. issuing long-term debt to repurchase shares of outstanding stock b. selling inventory on credit c. increasing short-term debt while decreasing long-term debt by an equivalent amount d. using cash to purchase new equipment e. increasing the sales on credit while reducing cash sales by the same amount Which one of the following transactions will increase the liquidity of a firm? a. issuing long-term debt to repurchase shares of outstanding stock b. selling inventory on credit c. increasing short-term debt while decreasing long-term debt by an equivalent amount d. using cash to purchase new equipment e. increasing the sales on credit while reducing cash sales by the same amount

Explanation / Answer

B) Selling inventoy on credit.

one of the liquidity ratios are current ratio which is current assets/ current liabilities

increase the accounts receivables

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