Which of the following would not affect the current ratio

- borrow long term funds to finance additional property, plant and equipment
- issue long-term debt to buy inventory
- issue ordinary shares to reduce current liabilities
- sell property, plant and equipment to reduce accounts payable
- increasing accounts payable through additional credit purchases

Which of your items are not a current asset or current liability. Every possible answer you have affects a current asset or a current liability, except for one, which is the correct answer.

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Originally Posted by pready

Which of your items are not a current asset or current liability. Every possible answer you have affects a current asset or a current liability, except for one, which is the correct answer.

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Yea that helps a lot

Which of the following statements would be considered false

- one would consider current assets and noncurrent assets when making investments decisions
- the performance of an entity's operations would be represented in the statement of comprehensive income
- risk would be considered as the chance that an actual result may differ from a planned outcome
- a company would be considered highly geared if its operations were financed more by debt than funds from equity participants
- a financial manager would place primary emphasis on the accrual based profits of an organisation for decision making

I am not here to do your homework for you. I gave you a way to solve the problem. First you have to know what a current asset and a current liability are. Current asset are cash or accounts that can be converted into cash like accounts receivable, short-term investments or inventory within one year or one accounting cycle. Current liabilities are accounts that are due to be paid within one year or one accounting cycle like accounts receivable.

Now I did the analyzing of your homework for you so you should be able to find the correct answer.

- one would consider current assets and noncurrent assets when making investments decisions
- the performance of an entity's operations would be represented in the statement of comprehensive income
- risk would be considered as the chance that an actual result may differ from a planned outcome
- a company would be considered highly geared if its operations were financed more by debt than funds from equity participants
- a financial manager would place primary emphasis on the accrual based profits of an organisation for decision making