Accounting for IGCSE & O level - Advanced Principles (Section 3 - No. 50)
What is the impact on the current ratio if a company uses cash to pay off a short-term liability?
The current ratio will increase.
The current ratio will decrease.
The current ratio will remain unchanged.
It depends on the size of the liability.
คำอธิบาย
Paying with cash lowers both current assets and current liabilities by the same amount. Hence, it would stay the same.