Apr 9, 2006, 09:11 AM
Which of the following transactions would increase a firm's current ratio?
a. Purchase of inventory on account
B. Payment of accounts payable
c. Collection of accounts receivable
d. Purchase of temporary investment for cash
I chose C collection of accounts receivable because I feel it will increase the increase asset which in turn would increase current ratio. Is my reasoning correct.
a. Purchase of inventory on account
B. Payment of accounts payable
c. Collection of accounts receivable
d. Purchase of temporary investment for cash
I chose C collection of accounts receivable because I feel it will increase the increase asset which in turn would increase current ratio. Is my reasoning correct.