Bb Blackboard Learnx New Tabckboard.com/webapps/ubsh-Iti-integration-BBLEARN//app/content/launchHandler?course id 132178 1&content idCampusPowered by BbeCampusePortfolios Community Content Collectionssignments > HW Assignment 4E MenuQUESTION 8Not changed since last attemptMarked out of 1.00F Flag questionHouston Company's current ratio is 3 to 2. The company is negotiating a loan, and thecompany's management understands that a higher (i.e., better) current ratio will reduce thecompany's cost of borrowing (interest rate). Which of the following transactions willimprove Houston Company's current ratio?Select one:O a. making a payment on a long-term debtO b. using cash to pay current liabilitiesO c. purchasing inventory on accountd. collecting on some of the company's accounts receivableO e. none of the aboveSave AnswersPrevious pageFinish attempt...

Question
Asked Feb 19, 2019
Bb Blackboard Learn
x New Tab
ckboard.com/webapps/ubsh-Iti-integration-BBLEARN//app/content/launchHandler?course id 132178 1&content id
Campus
Powered by Bb
eCampus
ePortfolios Community Content Collection
ssignments > HW Assignment 4
E Menu
QUESTION 8
Not changed since last attempt
Marked out of 1.00
F Flag question
Houston Company's current ratio is 3 to 2. The company is negotiating a loan, and the
company's management understands that a higher (i.e., better) current ratio will reduce the
company's cost of borrowing (interest rate). Which of the following transactions will
improve Houston Company's current ratio?
Select one:
O a. making a payment on a long-term debt
O b. using cash to pay current liabilities
O c. purchasing inventory on account
d. collecting on some of the company's accounts receivable
O e. none of the above
Save Answers
Previous page
Finish attempt...
help_outline

Image Transcriptionclose

Bb Blackboard Learn x New Tab ckboard.com/webapps/ubsh-Iti-integration-BBLEARN//app/content/launchHandler?course id 132178 1&content id Campus Powered by Bb eCampus ePortfolios Community Content Collection ssignments > HW Assignment 4 E Menu QUESTION 8 Not changed since last attempt Marked out of 1.00 F Flag question Houston Company's current ratio is 3 to 2. The company is negotiating a loan, and the company's management understands that a higher (i.e., better) current ratio will reduce the company's cost of borrowing (interest rate). Which of the following transactions will improve Houston Company's current ratio? Select one: O a. making a payment on a long-term debt O b. using cash to pay current liabilities O c. purchasing inventory on account d. collecting on some of the company's accounts receivable O e. none of the above Save Answers Previous page Finish attempt...

fullscreen
check_circle

Expert Answer

Step 1

As the current ratio is 3:2, it means the current assets are 1.5 times available for paying off the current liabilities.

Thus, if the current liabilities are paid off for the same amount, the current assets and current liabilities will get reduced by the same amount. This means the ex...

Want to see the full answer?

See Solution

Check out a sample Q&A here.

Want to see this answer and more?

Solutions are written by subject experts who are available 24/7. Questions are typically answered within 1 hour.*

See Solution
*Response times may vary by subject and question.
Tagged in

Business

Accounting

Other

Related Accounting Q&A

Find answers to questions asked by student like you

Show more Q&A add
question_answer

Q: I'm not understanding how to solve this problem. Please help, thanks!

A: Process firms accumulate production costs by process or department for a given eriod of time. Proces...

question_answer

Q: Indicate in which section  of the balance sheets of each accounts I have to classified. current asse...

A: Current assets (CA): Current assets are those assets owned by the company that can be convertible in...

question_answer

Q: Brief Exercise 13-1Blue Corporation uses a periodic inventory system and the gross method of account...

A: (a) (1) Prepare the journal entry to record the purchase of inventory:

question_answer

Q: During february, the activities of Evergreen Landscaping included the folowing transation and events...

A: Expenses means the cost incurred by the business to earn revenues. As per the matching principle of ...

question_answer

Q: Angie Silva has recently opened The Sandal Shop in Brisbane, Australia, a store that specializes in ...

A: Break-even point: Break-even point of sales is that level of sales at which the firm is neither earn...

question_answer

Q: The following accounts balances were taken  from harris Corporation's year end adjusted trial balanc...

A: A closing journal entry is an entry passed at the end of the accounting period. The entry is passed ...

question_answer

Q: Carla Vista Co. was organized on January 1. During the first year of operations, the following plant...

A: Plant assets: The assets which are used to generate revenue for the business operations for more tha...

question_answer

Q: The December bank statement and cash T-account for Stewart Company follow:   BANK STATEMENT D...

A: Bank Reconciliation statement Bank Reconciliation Statement is the statement which is prepared to ov...

question_answer

Q: Indicate whether each of the following activities would be reported on the statement of cash flows a...

A: Statement of cash flows: This statement reports all the cash transactions which are responsible for ...