Which of the following transactions would result in an increase in the current ratio?

  1. Collection of cash from an account receivable.
  2. Selling shares of stock to stockholders in exchange for cash.
  3. Purchasing a building with cash.
  4. Declaration of a cash dividend by the board of directors.

Answer b. Selling shares of stock to stockholders in exchange for cash

Explanation: The current ratio analyzes each of an organisation’s current resources for its current liabilities. The current ratio assists financial backers in seeing more with regards to an organisation’s capacity to cover its transient obligation with its present resources and make related things correlations with its rivals and companions.

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