If a company with a current ratio of 2.0 pays $2,000 of its salaries payable, then its current ratio will
A)change, but not enough information is provided to determine if it will increase or decrease.
B)decrease.
C)remain the same.
D)increase.

Question

Quizplus · Accepted Answer

Paying $2,000 of salaries payable decreases both current liabilities and current assets by the same amount, but since the current ratio is above 1, the ratio will increase.

If a Company with a Current Ratio of 2