Question: 1. Which of the following changes of accounts would decrease the current ratio a. increase in accounts payable b. increase of property plant and equipment

1. Which of the following changes of accounts would decrease the current ratio

a. increase in accounts payable b. increase of property plant and equipment c. increase in share capital d. increase in inventory e. none of the options would decrease the current ratio

2. Which of the following statements is NOT correct

a. low liquidity ratios are undesirable b. a lower liquidity ratio generally mens lower ability to pay current obligations c. management should ain for the highest possible liquidity ratios d. The higher the liquidity ratios the lower the risk for both creditors and owners

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