Considered alone, which of the following would increase a company's current ratio?

a. An increase in accounts payable.

b. An increase in net fixed assets.

c. An increase in accrued liabilities.

d. An increase in notes payable.

e. An increase in accounts receivable.

Question

Maliyah Hurley

Business

29 April, 13:59

Considered alone, which of the following would increase a company's current ratio?

a. An increase in accounts payable.

b. An increase in net fixed assets.

c. An increase in accrued liabilities.

d. An increase in notes payable.

e. An increase in accounts receivable.

+4

Answers (1)

Know the Answer?

Shannon Owen · Answer 1

e. An increase in accounts receivable.

Explanation:

Current ratio = Current Assets / Current Liability

According to above current ratio formula the increase in current assets and decrease in current liabilities will increase the current ratio. There is no decreasing option in the question so, we will consider a increase in the current asset. Te only current asset discussed in this question is Account Receivable. An Increase in accounts receivable will increase the current ratio.

Considered alone, which of the following would increase a company's current ratio?a. An increase in accounts payable.b. An increase in net fixed assets.c. An increase in accrued liabilities.d. An increase in notes payable.e. An increase in accounts receivable.

Considered alone, which of the following would increase a company's current ratio?

a. An increase in accounts payable.

b. An increase in net fixed assets.

c. An increase in accrued liabilities.

d. An increase in notes payable.

e. An increase in accounts receivable.