Question: Do the following events decrease, increase, or have no effect on a firm s current ratio? A ) Inventory is purchased with cash on hand.
Do the following events decrease, increase, or have no effect on a firms current ratio?
A Inventory is purchased with cash on hand.
B Company XYZ takes out a year loan, with the money being used to pay suppliers.
C A customer pays a past due bill the bill was not written off yet
D Company XYZ establishes a line of credit with Bank ABC, which will allow it to borrow money in the future.
E The company sells a year old machine, receiving cash from the sale.
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