Lincoln Industries' current ratio is 0.5. Considered alone, which of the following actions would increase the company's current ratio? a. Borrow using short-term notes payable and use the cash to increase inventories. b. Use cash to reduce short-term notes payable. c. Use cash to reduce accruals. d. Use cash to reduce long-term bonds outstanding. e. Use cash to reduce accounts payable.
Lincoln Industries' current ratio is 0.5. Considered alone, which of the following actions would increase the company's current ratio? a. Borrow using short-term notes payable and use the cash to increase inventories. b. Use cash to reduce short-term notes payable. c. Use cash to reduce accruals. d. Use cash to reduce long-term bonds outstanding. e. Use cash to reduce accounts payable.
Auditing: A Risk Based-Approach (MindTap Course List)
11th Edition
ISBN:9781337619455
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Chapter14: Completing A Quality Audit
Section: Chapter Questions
Problem 24CYBK
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Question
Lincoln Industries' current ratio is 0.5. Considered alone, which of the following actions would increase the company's current ratio?
a. |
Borrow using short-term notes payable and use the cash to increase inventories.
|
|
b. |
Use cash to reduce short-term notes payable.
|
|
c. |
Use cash to reduce accruals.
|
|
d. |
Use cash to reduce long-term bonds outstanding.
|
|
e. |
Use cash to reduce accounts payable.
|
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