Which of the following does NOT change a firm's current ratio?
A) The firm collects its accounts receivables.
B) The firm purchases inventory by taking a short-term loan.
C) The firm pays down its accounts payables.
D) None of the above.

Question

Quizplus · Accepted Answer

Collecting accounts receivables converts current assets from one form (accounts receivable) to another (cash), but does not change the total amount of current assets, thus leaving the current ratio unchanged.

Which of the Following Does NOT Change a Firm's Current