Which of the following statements is most correct?

Section B (2 Mark)

Which of the following statements is most correct?
A . If a company increases its current liabilities by Rs1,000 and simultaneously increases its inventories by Rs1,000, its current ratio must rise.
B . If a company increases its current liabilities by Rs1,000 and simultaneously increases its inventories by Rs1,000, its quick ratio must fall.
C . A company’s quick ratio may never exceed its current ratio.
D . Answers b and c are correct.

View Answer

Answer: D