Which of the following transactions will increase the current ratio (assuming the ratio is initially greater than 1)?
A) purchasing inventory on credit
B) selling inventory for more than cost
C) buying office supplies
D) collecting accounts receivable

Question

Quizplus · Accepted Answer

Selling inventory for more than cost increases current assets (cash or accounts receivable) without decreasing current liabilities, thus increasing the current ratio.

Which of the Following Transactions Will Increase the Current Ratio