Asked by Micah Jones on May 28, 2024
Verified
An increase in which one of the following accounts increases a firm's current ratio without affecting its quick ratio?
A) Accounts payable
B) Cash
C) Inventory
D) Accounts receivable
E) Fixed assets
Current Ratio
An indicator of a business's capability to settle obligations due within a year, measuring its immediate financial solvency.
Quick Ratio
A measure of a company's ability to meet its short-term obligations with its most liquid assets, calculated by subtracting inventories from current assets, then dividing by current liabilities.
Accounts Receivable
Amounts owed to a company by customers for goods or services delivered on credit.
- Acquire knowledge about various financial ratios and their impact on financial leverage and liquidity.
Verified Answer
Learning Objectives
- Acquire knowledge about various financial ratios and their impact on financial leverage and liquidity.
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