A company's current ratio is 2.0. Which of the following actions would lower the current ratio, assuming everything else remains the same? A) Borrow using short-term notes payable and use the proceeds to reduce long-term debt. B) Use cash to reduce accruals. C) Use cash to reduce accounts payable.

A company's current ratio is 2.0. Which of the following actions would lower the current ratio, assuming everything else remains the same? A) Borrow using short-term notes payable and use the proceeds to reduce long-term debt. B) Use cash to reduce accruals. C) 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

A company's current ratio is 2.0. Which of the following actions would lower the current ratio, assuming everything else remains the same?

A) Borrow using short-term notes payable and use the proceeds to reduce long-term debt.

B) Use cash to reduce accruals.

C) Use cash to reduce accounts payable.

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