Boosting current assets more than liabilities

Steps:

• Recall current ratio formula: current assets ÷ current liabilities.
• Evaluate each option's impact on current assets (CA) and current liabilities (CL).
• Calculate net change: positive if CA rises more than CL, or CL falls more than CA.
• Select option with highest ratio improvement.

Why A is correct:

• Buying on credit adds $2000 to inventory (CA) and payables (CL); selling for$3000 cash replaces inventory with cash (net CA +$3000, CL +$2000), raising ratio per formula.

Why the others are wrong:

• B: Reduces CA by $1000 cash with no CL change, lowering ratio.
• C: Adds $10000 to non-current assets (not CA) and CL, decreasing ratio.
• D: Shifts $1000 from inventory to receivables (both CA), leaving totals unchanged.

Final answer: A