Question

Considered alone, which of the following would increase a company's current ratio?

Group of answer choices:

A)A decrease in accounts receivable.

B)A decrease in accrued liabilities.

C)An increase in accounts payable.

D)An increase in notes payable.

E) An increase in net fixed assets.

Answer 1

As per the details given in the question-

Correct Answer is option B
Decrease in accrued liabilities tends to increase in current ratio

Current Ratio = Current Asset / Current Liability
Company current ratio increase when there is increase in current Asset or decrease in current liability.
Option A is not correct because Accounts receivable is a current Asset, if Current asset is decrease Current ratio wil be decrease.
Option E is not correct because Net fixed asset is not a part of current asset and current liability
Option C & D are incoorect because they are the current liability, increase in current liability tends to decrease in current ratio.

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