Question: One common problem with the current ratio is that it is susceptible to window dressing. If prior to the end of the accounting period Saxon

One common problem with the current ratio is that it is susceptible to "window dressing." If prior to the end of the accounting period Saxon Company has a current ratio of 1.5 and management wishes to boost its current ratio it may decide to:

	a.	purchase short-term investments with cash.
	b.	purchase more inventory with cash.
	c.	pay off accounts payable prior to year-end.
	d.	purchase more inventory on account.

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